JOHANNESBURG, South Africa-After a series of delays, the battle for the South African cellular market appears set to begin. Third mobile network operator Cell C has launched a massive marketing campaign to begin winning some mind share of South African mobile subscribers.
The Saudi Arabian-backed consortium recently managed to secure a 15-year roaming agreement with incumbent network Vodacom. The significance of the agreement is that the company expects to realize millions of dollars of savings in equipment, while affording it the advantage of national coverage from the first day of going live in November and its official launch in December.
The first phase of the proposed network rollout will comprise 550 base stations, which the network deems sufficient to cover the country’s major metropolitan areas. The company hopes to have 2,000 base stations active in the country within 18 months.
Cell C Chairman and Chief Executive Officer (CEO) Talaat Laham said customers could look forward to a degree of flexibility and choice through its service not currently available in South Africa. The flexibility would apply to both prepaid and postpaid subscribers.
Laham added that services would be targeted primarily at small-to-medium enterprise users, with high-end corporate users targeted once technologies such as General Packet Radio Service (GPRS) are available.
Cell C has ruled out any talk of a price war erupting. However, the incumbent networks, MTN and Vodacom, countered any possible move in this direction by both announcing per-second billing. Per-second billing has been something of a bone of contention among the operators as reports surfaced that MTN and Vodacom might increase prepaid tariffs.
An MTN spokesman said it had not increased its prepaid tariffs, but applied to the regulatory authority Independent Communications Authority of South Africa (ICASA) for “a minor adjustment” to some of its packages rates.
An aspect that many see as working in favor of the new network is the expected increase in churn levels, particularly among prepaid subscribers. Cell C has said all subscribers will be able to take advantage of the latest in technological advances in terms of GSM, but that this will not be the core of its marketing drive. Instead the operator will focus on differentiation through service and quality.
Laham added that given current projections of mobile subscriber growth, the company expects to capture between 15 percent and 20 percent of the total market by 2006, which would be between 2.5 and 3 million of the total estimated 16 million users.
