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Cell C positioned well in evolving industry

25th July 2023

By: Natasha Odendaal

Creamer Media Senior Deputy Editor

     

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Digital lifestyle group Cell C has the best of both worlds, as it effectively evolves from a telecommunications operator to a digital lifestyle technology company, says Cell C CEO Jorge Mendes.

Amid a complex ecosystem and the emergence of new business models, the telecommunications “game” is changing fundamentally and rapidly, he highlighted at the Connected Africa conference, held in Johannesburg, on Tuesday.

In the telecommunications industry, the revenue and the capital expenditure (capex) disconnect is becoming even wider, he said, noting that, while there is space for fifth-generation (5G) technology, for example, in the enterprise segment, it is getting increasingly difficult to monetise the technology from a consumer perspective.

Further, monetisation gains from capex into infrastructure upgrades are starting to diminish, as operators are no longer gaining an uplift in revenue, but rather, maintaining the status quo, as in the case of the billions of rands injected into installing battery back-ups at base stations to ride out the energy crisis and maintain the quality connectivity consumers are used to.

“We have not done well in the return on capex invested over time. We have learned the lessons and it is time to move on and move forward. We have made a very conscious decision to be a buyer of network services, not invest.”

Cell C has been steadily decreasing capex as it transitions its network onto third-party networks in an effort to decrease infrastructure costs.

The group’s postpaid customers now roam on Vodacom, while its prepaid customers roam on MTN, expanding its national coverage with access to a network of up to 28 000 base stations, providing the company with a “powerful footprint” and efficiencies of scale.

“We are in the best position,” he commented, adding that it is a win-win as traffic is being carried on a network that has expansive capacity because the investments have already been made.

Cell C, having shed its infrastructure burdens, now has the space to focus on the customer and differentiate its offerings with the customer at the centre, unlock efficiencies and simplify a complex ecosystem, as, ultimately, it is about the customer experience and greater value.

“We are going to be disruptive in giving customers what they want. And we think we are in a really good position to really monetise it from this point of view.”

The company has been actively managing its customer base by pursuing more profitable customers, removing nonprofitable products and increasing its focus on retail product pricing after actively reviewing its product portfolio.

Ultimately, Cell C is enabling a digitally connected lifestyle for a customer, improving digital inclusion, empowering a digital and transformative landscape and embracing a digital world.

Edited by Creamer Media Reporter

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