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MTN, Cell C deal ‘meets regulatory requirements’

Agreement is ‘a pivotal step in Cell C’s turnaround strategy’, says Cell C CEO.

Cell C’s expanded roaming agreement with MTN South Africa, which was signed at the weekend after months of negotiation, “adheres to all applicable legal and regulatory requirements”, the companies said.

This statement by the parties appears designed to head off a potential challenge by rivals who may seek to derail the agreement through regulatory or court processes.

“Cell C and MTN will maintain their spectrum and each party will use its own frequencies,” Cell C said shortly after MTN announced the finalisation of the deal on Monday morning.

“Cell C will still have all of its licences and control its core network, transmission, billing system and subscriber management,” it said. However, management of the radio access network (base stations proving access to consumers) will be provided by MTN nationally.

Read: Cell C puts assets up for sale as losses deepen

The companies said the new roaming and services agreement will allow for network innovation and will promote efficient network infrastructure utilisation and sustainable investment in infrastructure.

“In 2018, Cell C and MTN entered into an initial roaming agreement that provided 3G and 4G services in areas outside the main metros. The expanded roaming agreement extends this coverage and gives nationwide roaming to the benefit of Cell C subscribers,” Cell C said.

“This roaming agreement will see Cell C’s 4G network coverage extended to 95% of the population. Cell C customers will have access to over 12 500 sites, of which 90% are LTE enabled.”

‘Pivotal step’

Cell C CEO, Douglas Craigie Stevenson said in the statement: “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.”

Cell C said the agreement is “in line with shifts in the global telecommunications industry toward more cost-effective network strategies that drive down costs and deliver greater operational efficiencies that ultimately benefit consumers”.

“There are already local examples of this type of roaming agreement in South Africa,” the company said, in probably reference to an arrangement between Vodacom and Rain.

“This roaming agreement is transformative for Cell C. The company is no longer encumbered by the high costs of building a network footprint and we can focus our energy and efforts into developing innovative and disruptive service offerings that will be welcomed by data hungry consumers. This is a win-win all round as it has long-term benefits for the economy, the industry and ultimately consumers,” said Craigie Stevenson.

The implementation of the expanded roaming agreement will commence in early 2020 and the transition is expected to take up to 36 months to complete.

“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 company said. “Since reporting its financial results, Cell C has seen incremental improvements to the bottom line as the operational efficiencies start to have a positive impact on the financial performance of the company.”

“The management focus on retaining profitable customers and expenditure savings has generated meaningful positive cash flow improvement on a month-on-month basis. It is a good sign that we are doing the right things and are on the road to recovery,” said Cell C chief financial officer Zaf Mahomed.

© 2019 NewsCentral Media

This article was published with the permission of TechCentral, the original publication can be viewed here.

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