Yesterday Cell C announced that it had received a $350-million (around R3.5-billion) investment from Dubai’s Oger Telecom. Both companies believe that the investment, which comes after ICASA announced it would conduct a review of the current cost of communications, shows Oger’s faith in Cell C’s current strategy, and that ICASA’s findings will be fair, leading to lower costs for end users.
Mohammed Hariri, chairman of Cell C and Oger Telecom, said, “Under the leadership of Alan Knott-Craig, Cell C has gone from strength to strength. The company has a solid business strategy and we are confident that the Regulator will make decisions that give smaller players a better chance of being sustainable competitors.”
A further R2.2-billion will also be available to the operator through a loan arranged by Nedbank and the Development Bank of South Africa.
Cell C has enjoyed great success over the last year, seeing its install base grow to 11.5-million customers. This has no doubt been the result of aggressive pricing, where it introduced extremely competitive call rates for local and international calls, as well as some of the cheapest data bundles in the country.
But that growth has come at a cost. Speaking to MyBroadband, Alan Knott-Craig, the CEO of Cell C, said that traffic on the network has doubled in the last 15 months.
And over the last few months users have been vocal about problems with Cell C’s network. These range from no data connectivity, despite having full signal, to calls dropping repeatedly before even being connected.
The money from the investment will be used to upgrade infrastructure, though. The company plans to extend its coverage from the south, near Vereeniging, all the way to the north, near Bela Bela.
Knott-Craig also said, “Without investment we can’t address [the problems].”
This means there could be hope for those who are on contracts with Cell C, and have no affordable way out. Meanwhile, others might be sitting on the sidelines waiting to see whether the network’s newfound cash reserves really do make a difference, before letting their wallets vote.