Some form of market consolidation or partnership in the telecommunications industry was “inevitable”, Cell C CEO Alan Knott-Craig said on Tuesday.
His comments come as speculation is mounting that South Africa’s third-largest cellular provider is set to merge with Telkom’s mobile unit, 8ta.
Knott-Craig said partnerships would enable the smaller operators, hampered by lack of scale, to compete more effectively with their larger competition. “…it is only then that customers will benefit from tariff reductions, network availability and quality of service.”
He did not directly comment on the rumoured Cell C–8ta merger, but noted that shareholders would direct any decisions on consolidation or future partnerships of Cell C.
No immediate comment was available from the two-year-old 8ta.
Shares in Telkom continued to rise on Tuesday amid the merger speculation, trading 1.74% higher at R19.33, extending the previous day’s gain of more than 5.56% to R19 a share.