A decade on, and Cell C is no longer the 'new kid on the block'. Battling valiantly against pan-African behemoths MTN and Vodacom/Vodafone, South Africa's third mobile operator is slowly carving out a defined identity in the local market.
In fact, its 16.6 million customers mean it's certainly not playing a bit-part role in the unfolding drama of South Africa's telecoms industry.
And what a drama this is. It's comprised of a number of acts: mobile termination rates, spectrum allocation, consumer price wars - and surely many more instalments still to be written. Cell C is taking centre stage at every turn.
"There's definitely a place for Cell C in the South African market," confirms Ovum senior analyst Richard Hurst. "It has realised who it is, and how to play to its strengths."
In telecoms, scale economies are important. While its ownership structure means it's essentially 75 percent owned by Saudi-based Oger Telecom, Cell C doesn't necessarily benefit as much as its peers when it comes to operational support from a broader parent group. MTN SA has the broader MTN Group, Vodacom has Vodafone.
Cell C's CEO Jos'e dos Santos says while the operator is vulnerable to rising costs across the board, particularly in the areas of imported infrastructure and higher energy costs, it remains in a healthy position.
"Yes, in some areas margins are trending downwards, but if you can stay ahead of this with solid operational efficiencies and approaches to cost-management, there's still a lot of great business in both voice and data," he tells Brainstorm.
Cell C added 3.5 million new subscribers last year and reported 16.6 million active subscribers as of April 2014.
Known for being controversial and vocal, Cell C has bold ideas about what needs to happen for South Africa to see real changes in the high costs of mobile connectivity.
Cell C, among other parties, is proposing a national wholesale LTE network to minimise concerns around spectrum shortage.
Jos'e dos Santos, Cell C
Dos Santos doesn't minimise the massive achievements over 20 years of having cellular networks in South Africa, but is quick to add that there's a lot that hasn't been achieved. Call rates remain stubbornly high and 3G coverage is sporadic at best in many areas of the country.
Sins of the past
"Our challenge as operators is to build high-speed networks that keep pace with the rapidly-growing demands of customers, and to broaden coverage in remote areas that are currently underserviced."
Dos Santos believes more has to be done to redress the historical imbalances of a protected telecoms industry, and the monopolies and duopolies that developed - what he refers to as 'the sins of the past'.
He outlines an audacious vision for overcoming the industry's central problems of high capex requirements and scarce spectrum. The concept of shared infrastructure lies at the heart of this blueprint for the future.
"Cell C, among other parties, is proposing a national wholesale LTE network to minimise concerns around spectrum shortage, to be owned and funded by a consortium of industry and government stakeholders."
There are inherent inefficiencies, argues Dos Santos, in each operator laying fibre cables next to each other. With the shared infrastructure model, capital expenditure per company would be significantly less, the delivery of broadband to rural areas would speed up, and government could play a more directive role in stipulating the footprint of the rollouts. "It would allow multiple players to compete at the retail layer on a regulated wholesale price."
The current price of a megabyte of mobile broadband means that consumers simply wouldn't be able to take advantage of high-speed LTE networks, even if they become more pervasive. Prices need to be in the region of 1c to 2c per megabyte, to make LTE viable, he says.
The only way to ultimately reach those price points, he adds, is to leverage the efficiencies of shared infrastructure.
Backlash
Ovum's Hurst says other industry players will naturally baulk at the idea of shared infrastructure. "This is a great notion in theory - it makes sense to not have a duplication of effort," he says, but adds that there would be a huge backlash from those who have invested in their own mobile broadband infrastructure to date.
He says one just has to look at the endless delays with local loop unbundling - which Hurst describes as 'a flavour of shared infrastructure' - to see how long it takes for these regulatory processes to materialise.
Perhaps more likely than a top-down regulatory approach enforcing infrastructure sharing across the board, is a bottom-up free market scenario where competitors naturally come to their own sharing agreements. The recent agreement between MTN and Telkom will see the yellow operator assuming responsibility for the growth and maintenance of Telkom's mobile network - and will allow each operator to roam on the other's network.
Natural progression
As Telkom Business, MTN Business and Vodacom Business aggressively punt cloud and hosted services in the enterprise segment, the sweet-spot for Cell C may well be in the small business segment.
"This would be a natural progression for Cell C," notes Hurst, adding that cloud services for smaller companies is still somewhat nascent in South Africa. The operator has already trained its sights on the small business segment from a voice perspective, launching a number of packages specifically aimed at the SME.
Over and above that, Hurst believes there are opportunities for Cell C to partner with other technology players to evolve into higher-value business service beyond simple voice and data connectivity.
Back to the consumer space, and Dos Santos says Cell C is focused on the core issues of coverage, quality and price - not getting too caught up in providing new value-added services over the network: "These kinds of things are moving targets, trends that may come and go. But we certainly engage with a number of industry players that provide VAS services, and there's a lot of creative stuff that we'll see coming soon."
Essentially, consumers are looking for simplicity. "We've made a lot of strides already in achieving this, but in the near future, you'll see Cell C coming out with some very simplistic pricing models - such as those one would see in Western Europe, for instance."
Critics have pointed out that Cell C's aggressive pricing strategies may well be unsustainable, but the operator remains resolutely proud of its mantle as 'consumer champion'.
Expect it to continue agitating the status quo, and to continue with its noisy lobbying of regulators.
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