Telecommunications giant MTN and mobile operator Cell C have concluded an expanded roaming agreement that will extend Cell C’s coverage nationwide.
The agreement builds on the 2018 initial roaming agreement that provided second-generation, third-generation (3G) and fourth-generation (4G) roaming services on MTN’s network in areas outside of the main metropolitans.
The updated roaming agreement will extend Cell C’s 4G network coverage to 95% of the population and provide access to over 12 500 sites, 90% of which are long-term-evolution-enabled.
The 36-month implementation of the expanded roaming agreement will start in early 2020.
“This is a pivotal step in Cell C’s turnaround strategy. One of the key pillars of this turnaround is to implement a revised network strategy that enables Cell C to manage its network capacity requirements in a more cost efficient and scalable manner,” said Cell C CEO Douglas Craigie Stevenson.
Cell C’s turnaround strategy is focused on ensuring operational efficiencies, restructuring its balance sheet, implementing a revised network strategy and improving overall liquidity.
The roaming agreement will enable network innovation, promote efficient network infrastructure use and sustainable investment in network infrastructure.
“This is aligned to MTN’s strategy to further develop the group’s wholesale business and will allow both MTN and Cell C to harness greater efficiencies in providing telecommunications services, while supporting a more sustainable and competitive industry,” MTN said in a statement on Monday.
The embattled Cell C has been reporting incremental improvements to its bottom line as the operational efficiencies start to have a positive impact on the financial performance of the company.
Cell C had posted a net loss of R8-billion for the financial year to May 31. This had included R6.2-billion in noncash impairments.
It is also heavily indebted, with 45% shareholder Blue Label Telecoms having come under fire from its shareholders this year for having bought an interest in the mobile operator, given its estimated R9-billion in debt.
Now, with the company no longer encumbered by the high cost of building a network footprint, Cell C can focus on developing innovative and disruptive service offerings for data-hungry consumers, Craigie Stevenson adds.
The roaming agreement, which adheres to all applicable legal and regulatory requirements, stipulates that the duo will each maintain their spectrum and each party will use its own frequencies.
Cell C will still have all of its licences and control its core network, transmission, billing system and subscriber management.
Meanwhile, Cell C continues to pursue a recapitalisation which will improve the company’s overall liquidity.
“MTN SA continues to account for Cell C roaming revenue on a cash basis, and payments received since June have remained on schedule.
“Cell C continues to work on its recapitalisation and liquidity challenges which, if adequately resolved, would result in a change in MTN’s accounting treatment of Cell C roaming revenues back to an accrual accounting methodology,” MTN noted.
Discussions on the recapitalisation are under way between Cell C’s appointed independent financial and legal advisers, representing the lenders, and various stakeholders.
This comes as telecommunications group Telkom last week confirmed that preliminary discussions were under way for it to buy out Cell C, after substantially concluding its due diligence.
"The potential acquisition will be subject to Cell C completing a financial restructuring to ensure that its gearing levels are reduced to a sustainable level as specified by Telkom and commercial contractual relationships are renegotiated to terms acceptable to Telkom," it said in a statement.