Cell C CEO Jose dos Santos
Photo by: Duane Daws
In a bold bid to draw more postpaid customers to its network, South Africa’s third-largest mobile operator Cell C plans to spend hundreds of millions of rands in assisting customers to migrate away from their current contractual obligations with other operators.
The new Contract Buy-Out proposition would see the operator paying out between R1 000 and R10 000 towards the termination fees of prospective clients’ contracts with rival mobile operators.
Presenting the proposal to media at Cell C’s headquarters in Woodmead, on Wednesday, CEO Jose Dos Santos said the move was part of the company’s strategy to capture the postpaid market following aggressive manoeuvres to outbid rivals in the prepaid market over the past two years.
“We gave MTN a good run on prepaid. Now we are going to give Vodacom a good smack [in the postpaid market],” he averred.
Rising from a subscriber base of 9.2-million in 2011, Cell C now boasted nearly 21-million customers, 17.7-million of which were using prepaid products.
The operator had been gaining critical mass in recent years, with 4 485 sites – and another 1 353 set to come online within months – covering 81% of South Africa’s population with third-generation technology.
Cell C was also in the process of separating from its roaming agreement with Vodacom, which now only carried 8% of Cell C’s voice traffic and 4% of its data traffic, as it prepared its network to take on the bigger rivals once again.
“So many South Africans are feeling trapped in long-term contracts by their providers that ask for extortionary cancellation fees for early termination.
“We understand that carriers must recoup costs for the handset when customers leave before a contract comes to an end, but charging any percentage of the remaining contract subscription as a termination fee is ludicrous,” Dos Santos commented.
Potential customers wanting to sign up for Cell C’s Epic product range would also receive a new handset in exchange for their previous contract mobile phone.
Cell C also vowed to freeze the price of its contracts – which ranged between R69 and R999 a month – for the next two years.