MTN committed to supporting Cell C – within reason
Telecommunications group MTN remains committed to “doing its part” in extending a helping hand to embattled Cell C; however, saving South Africa’s third-largest mobile operator is not the responsibility of MTN.
Cell C and MTN are currently in negotiations over a roaming deal that could significantly lift the network investment and management burden currently crippling the smaller operator.
“We are committed to working with Cell C. [However], whatever we do with Cell C, first and foremost, should be in the best interest of MTN shareholders,” says MTN South Africa CEO Godfrey Motsa.
“There are thousands of jobs at Cell C and tens of thousands of people affected. We should do our part. They are a partner and significant customer, [but] it is not MTN’s responsibility to save Cell C.”
Speaking at the yearly MyBroadband Conference, he explained that the Phase 1 deal allowed Cell C to roam on MTN’s rural network, with discussions under way to extend this roaming arrangement to urban areas.
Another potential result is the expected integration of Cell C’s infrastructure in the long term.
“Cell C has spoken about becoming a huge mobile virtual network operator (MVNO),” Motsa explains, highlighting that MTN, which has invested north of R50-billion into its own network, has the capacity to handle the load.
“When the deal and the transition period have been concluded, Cell C’s customers will benefit from 95% fourth-generation coverage.
The opening of MTN’s infrastructure to MVNOs and allowing other mobile network operators to roam on its network are the “best way” to stimulate competition and reduce prices.
The contemplated agreement with MTN would result in substantial cost savings for Cell C by reducing network and capital expenditure, CEO Douglas Craigie Stevenson said during a presentation at shareholder Blue Label in October.
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