{"id":52400,"date":"2014-01-30T00:05:36","date_gmt":"2014-01-29T22:05:36","guid":{"rendered":"http:\/\/businesstech.co.za\/news\/?p=52400"},"modified":"2014-01-29T22:26:50","modified_gmt":"2014-01-29T20:26:50","slug":"is-cell-c-making-money","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/mobile\/52400\/is-cell-c-making-money\/","title":{"rendered":"Is Cell C making money?"},"content":{"rendered":"

It’s been nearly six months since an analyst\u00a0criticized\u00a0Cell C<\/a>\u00a0for decimating its own business case which, he said, would\u00a0ultimately\u00a0lead to its demise in 2014.<\/p>\n

Paul Theron<\/a>, CEO of\u00a0Vestact Limited<\/a>\u00a0said in August last year that\u00a0Cell C is \u201cbasically burning the furniture over there to stay in business,\u201d and had to raise more money to stay afloat.<\/p>\n

The analyst said that the\u00a0company\u00a0was\u00a0hurting the mobile market in South Africa for everyone, including itself, with its aggressive pricing strategy.<\/p>\n

\u201cCell C will be dead within six months. Listen to me now \u2013 they are under such pressure that they basically decimated their own business chasing market share,\u201d he said.<\/p>\n

Cell C is not obliged to provide its financial details, as it is not a public company, and has not done so since CEO, Alan Knott-Craig<\/a>\u00a0took the reins in January 2012.<\/p>\n

Knott-Craig is currently recovering from a stroke he suffered late in 2013.<\/p>\n

Business Tech has on several\u00a0occasions, over the past several months, questioned Cell C on its financial state.<\/p>\n

In its most recent reply, acting CEO at Cell C,\u00a0Jose Dos Santos<\/a>, said:\u00a0“Cell C is alive and well. We are growing at an acceptable rate and will inform you of our performance in due course. We cannot comment on specific financial information as a private company.”<\/p>\n

\"Alan<\/a>

Alan Knott-Craig<\/p><\/div>\n

In 2013, group received\u00a0an injection of R5.7 billion from\u00a0Oger Telecom<\/a>, the Lebanese-controlled firm with an indirect 75% holding in the SA operator,\u00a0which invested a further $350-million (around R3.5 billion) and key lenders \u201cincluding\u00a0Nedbank<\/a>\u00a0and the\u00a0Development Bank of South Africa<\/a>\u201d which provided R2.2 billion.<\/p>\n

However, at the time and long after, Knott-Craig stressed that if the\u00a0regulatory framework in SA is not conducive to investment, his backers wouldn\u2019t invest in the group.<\/p>\n

The bulk of that funding was set to go towards the operator’s network which has come under strain amid rising subscriber numbers and increased data traffic.<\/p>\n

In July, Knott-Craig said that Cell C is on a three year path to profitability, pointing out\u00a0that operators in SA needed a market share of between 20-25% to be profitable.<\/p>\n

In November,\u00a0the operator announced that it had hit 13 million subscribers for the first time, taking its share towards 20%, up from approximately 11.7 million in July and a market share of 17%.<\/p>\n

Icasa call rate cut<\/strong><\/p>\n

On Wednesday (29 January), the\u00a0Independent Communications Authority of South Africa (Icasa) announced new call termination rates (CTRs).<\/p>\n

CTRs refer to the fee that one network charges another for receiving and terminating calls on its network.<\/p>\n

According to the new regulations, the rate will drop to R0.20 from 1 March 2014, with a further drop to\u00a0R0.15 in 2015, and R0.10 the following year.\u00a0This is the rate, per minute, the\u00a0smaller\u00a0operators will pay MTN and Vodacom to carry calls.<\/p>\n

Vodacom and MTN, meanwhile, will pay\u00a0R.044\u00a0to carry calls from operators including Telkom Mobile and Cell C.<\/p>\n

\u201cThis comes as a relief to Cell C as we have over the last 18 months committed ourselves to leading price competition even at the expense of our own margins, while motivating to Icasa for pro-competitive relief,” said\u00a0Cell C acting CEO, Jose Dos Santos.<\/p>\n

“Without this intervention it was likely that the South African market would have continued to have been an effective duopoly to the detriment of the consumer, industry and the South African economy. With the support of this regulation, the mobile market will continue to become more competitive on a sustainable basis.”<\/p>\n

The operator said that by increasing its share of the market and putting further pressure on the dominant competitors, it is confident it can drive access to more affordable communications for all South Africans, even those not on its network.<\/p>\n

\u201cIcasa has made a decisive and positive move in publishing these regulations, which we believe is another critical step in levelling the SA telecoms market,\u201d Dos Santos said.<\/p>\n

More on Cell C<\/h3>\n

Cell C\u2019s Knott-Craig warns backers may stop investing<\/strong><\/a><\/p>\n

Cell C dead by 2014: analyst<\/strong><\/a><\/p>\n

Cell C exceeds site roll-out target<\/strong><\/a><\/p>\n

Cell C accelerates subscriber growth<\/strong><\/a><\/p>\n

Cell C seeks profitability within 3 years<\/strong><\/a><\/p>\n

Cell C: where the billions will go<\/strong><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Its been nearly six months since an analyst criticized Cell C for decimating its own business case which, he claimed, would ultimately lead to its demise in 2014.<\/p>\n","protected":false},"author":10,"featured_media":23031,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_sma_x_autopost_status":"idle","_sma_x_autopost_error":"","_sma_x_post_id":"","_sma_x_attempts":0,"footnotes":""},"categories":[34],"tags":[42,26,4339,5141,6523],"class_list":["post-52400","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-mobile","tag-cell-c","tag-headline","tag-jose-dos-santos","tag-paul-theron","tag-vestact-limited"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/52400","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=52400"}],"version-history":[{"count":8,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/52400\/revisions"}],"predecessor-version":[{"id":52433,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/52400\/revisions\/52433"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/23031"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=52400"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=52400"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=52400"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}