http://www.engineeringnews.co.za
  SEARCH
Login
R/€ = 14.10Change: -0.09
R/$ = 10.74Change: -0.07
Au 1266.34 $/ozChange: 1.47
Pt 1411.50 $/ozChange: 2.50
 
 
Note: Search is limited to the most recent 250 articles. Set date range to access earlier articles.
Where? With... When?








Start
 
End
 
 
And must exclude these words...
Close Main Search
Close Main Login
My Profile News Alerts Newsletters Logout Close Main Profile
 
Agriculture   Automotive   Chemicals   Competition Policy   Construction   Defence   Economy   Electricity   Energy   Environment   ICT   Metals   Mining   Science and Technology   Services   Trade   Transport & Logistics   Water  
What's On Press Office Tenders Suppliers Directory Research Jobs Announcements Contact Us
 
 
 
RSS Feed
Article   Comments   Other News   Research   Magazine  
 
 
Oct 18, 2012

Cell C boss sees merit in consolidation, calls for wholesale LTE network

Back
Dubai|Engineering|Cell C|Lanun Securities|Oger Telecom|Systems|Telkom|Expansive Network|Service|Systems|Telecommunications|Telecommunications Players|Alan Knott-Craig|Dubai|Broadband|Broadband Technology
Engineering|Systems||Service|Systems||||
dubai|engineering|cell-c-company|lanun-securities|oger-telecom|systems-company|telkom|expansive-network|service|systems|telecommunications|telecommunications-players|alan-knottcraig|dubai-province-or-state|broadband|broadband-technology
© Reuse this



While a merger between the two smaller telecommunications players Cell C and Telkom's 8ta was not tabled, Cell C CEO Alan Knott-Craig said that consolidating with another, preferably local, company made sense.

The consolidation of two smaller telecommunications players into a stronger and bigger third operator would provide enough scale to compete better with MTN and Vodacom, while pushing down prices for consumers.

He noted that when an operator reduced prices, citing Cell C’s dramatic tariff reduction to a standard 99c a minute locally and to 50 other countries regardless of the network or time of day, margins become thinner.

“You need scale to drop prices and compete effectively. You can get scale by growing the business over the next three or four years, or you can try and achieve it quicker, and there is only one way [to do that] – consolidation,” he explained.

Responding to questions surrounding the 8ta-Cell C merger speculation, Knott-Craig told Engineering News Online that a potential merger with Telkom’s mobile arm would have “huge” benefits and balance the two parties’ shortfalls.

He commented that 8ta was a good company, with good assets, while Cell C, with its own expansive network, had gained some traction with the group hitting the ten-million subscriber mark this week.

Further, the government was examining options for Telkom after Cabinet rejected a potential strategic deal wherein South Korean firm KT Corp offered R2.6-billion for a 20% stake in the South African telecommunications group in June.

“The KT Corp deal was never going to be a good deal and they were dead right to dump that one,” he said, adding that no advantages would have been gained from the deal.

Knott-Craig was not concerned about government being a barrier to any new deal, particularly with a local company, saying that the State did not actually interfere as much as people believed.

However, he reaffirmed that any decision on a potential Cell C merger – locally or internationally – would need to be approved by its shareholders.

Dubai-based Oger Telecom holds a 60% direct shareholding in Cell C, as well as 15% indirect shareholding through its wholly owned subsidiary Lanun Securities. Black economic-empowerment partner CellSaf owns the remaining 25%.

No talks have been initiated, but if faced with a potential deal, Knott-Craig would prefer to partner with a local company.

Meanwhile, Knott-Craig stressed that the roll-out of long-term evolution (LTE) needed to be a national, collaborative effort if the industry was to deliver a fast, efficient and affordable LTE network to its consumers.

All the operators were working on their own roll-out of an LTE network, which he said was a good marketing ploy; but even though Cell C was in the better position, with the least number of customers and same amount of spectrum, it was still not the correct way of rolling out technology and lowering the costs.

“The operators are talking about activating hundred’s of sites out of a network of thousands of base stations, and they are built in high data-use areas, where many will jump at LTE, further reducing the [broadband] speed and possibly turning [customers] off the technology,” he explained.

The insufficient, slow roll-out of fibre connections to LTE-capable base stations, as well as limited spectrum and LTE devices and high costs – both to the consumer and operator, would hamper the performance and development of the latest broadband technology.

He believed that the industry, in a consortium, should develop one national LTE network, instead of four individual networks, and introduce the competition, in excess of 200 possible LTE service providers, for instance, on a regulated wholesale network.

This would result in a more personalised service and better quality for consumers, a properly built network and the efficient use of the right spectrum, which would not need to be divided and auctioned, and would lower the capital investment for operators.

Further, progressing to LTE Advanced on one network would be far easier and cheaper than on four different networks, Knott-Craig pointed out.

LTE Advanced specifications were close to completion and testable systems could be ready as early as 2013, becoming a reality in 2014.

He believed that the one national, wholesale network, assuming maximum footprint, which included rural coverage and a widely spread out network, would cost about R10-billion and take less than a year to build.

Edited by: Mariaan Webb
© Reuse this Comment Guidelines (150 word limit)
 
 
 
 
 
 
 
 
Other ICT News
Despite being Africa’s economic powerhouse, South Africa has fallen behind in terms of the number of people per 100 that have access to fixed and mobile broadband, Saab Grintek Technologies CTO Suraj Ramlall said on Tuesday. Broadband in South Africa was generally...
Some of the best innovations worldwide had been conceptualised and delivered during or immediately following a recessionary period, Internet Solutions MD Saki Missaikos said on Tuesday. Speaking at the Southern Africa Telecommunication Networks and Applications...
Fibre has emerged as a key aspect of telecommunications group Telkom’s turnaround and its ambitions of becoming “a clear broadband leader”. Speaking at the Southern Africa Telecommunications Networks and Applications Conference, in Port Elizabeth, on Tuesday,...
More
 
 
Latest News
Despite various challenges related to the extraction of shale oil and gas, as countries grow accustomed to the idea, the use of shale as a form of energy will be more widely pursued, international oil and gas market analyst Michael Lynch said on Tuesday. Speaking at...
A consortium led by two Kenyan firms won a government tender to build a 1 000-MW, coal-fired power plant, company officials said on Tuesday, part of moves to satisfy rising demand for energy in East Africa's biggest economy. Kenya suffers from regular blackouts due...
TNPA CEO Tau Morwe
The announcement of the successful bidder for the construction of Durban’s long-awaited passenger cruise terminal was imminent, Transnet National Ports Authority (TNPA) CEO Tau Morwe told delegates at the African Ports Evolution Conference in Durban on Tuesday. ...
More
 
 
Recent Research Reports
Road and Rail 2014: A review of South Africa's road and rail infrastructure (PDF report)
Creamer Media’s Road and Rail 2014 report examines South Africa’s road and rail transport system, with particular focus on the size and state of the country’s road and rail network, the funding and maintenance of these respective networks, and the push to move...
Real Economy Year Book 2014 (PDF Report)
This edition drills down into the performance and outlook for a variety of sectors, including automotive, construction, electricity, transport, steel, water, coal, gold, iron-ore and platinum.
Real Economy Insight: Automotive 2014 (PDF Report)
This four-page brief covers key developments in the automotive industry over the past 12 months, including an overview of South Africa’s automotive market, trade figures, production and the policies influencing the sector.
Real Economy Insight: Construction 2014 (PDF Report)
This five-page brief covers key developments in the construction industry over the past 12 months. It provides an overview of the sector and includes details of employment in the sector, infrastructure and municipal spending, as well as insight into companies’...
Real Economy Insight: Electricity 2014 (PDF Report)
This five-page brief covers key developments in the electricity industry over the past 12 months, including details of State-owned power utility Eskom’s generation activities, funding and tariffs, independent power producers and prospects for the sector.
Real Economy Insight: Road and Rail 2014 (PDF Report)
This six-page brief covers key developments in the road and rail industries over the past 12 months, including details of South Africa’s road and rail network and prospects for both sectors.
 
 
 
 
 
This Week's Magazine
South African State-owned defence industrial group Denel has announced its fourth consecutive year of profits. The group's results for the financial year 2013/2014 were recently announced at its head office in Centurion, south of Pretoria. Revenues grew by 17%, net...
There is little opportunity for JSE-listed infrastructure company Group Five to grow shareholder value in the domestic market, says CEO Mike Upton. He says value can still be found in the private sector, in the renewable and industrial power sector, as well as in...
The National Association of Automobile Manufacturers of South Africa (Naamsa) has announced the event dates of the 2015 Johannesburg International Motor Show (JIMS). The event will take place from October 14 to October 25, 2015, at the Johannesburg Expo Centre, Nasrec.
UK engineering support services provider Babcock is set to deliver the largest order of global truck manufacturer DAF’s truck tractors in Southern Africa to bulk carrier road-based logistics company Ngululu Bulk Carriers (NBC), with 133 trucks to be delivered in...
Digital radio communications in the African local government space can open up the world, but have many challenges to overcome, notes integration and migration of legacy radio communications infrastructure with digital mobile radio company Emcom Wireless head of...
 
 
 
 
 
 
 
 
 
Alert Close
Embed Code Close
content
Research Reports Close
Research Reports are a product of the
Research Channel Africa. Reports can be bought individually or you can gain full access to all reports as part of a Research Channel Africa subscription.
Find Out More Buy Report
 
 
Close
Engineering News
Completely Re-Engineered
Experience it now. Click here
*website to launch in a few weeks