Cell C is aggressively targeting the low end of the local cellular market, which it says provides ample opportunities for growth.
Simon Camerer, Cell C's executive head of marketing, says it is targeting customers whose income is between R1 000 to R5 000 per month, which puts them within the living standards measure of three to seven.
He says 50% of the market, which is within that range, has not been penetrated. "There is a lot of value in the bottom-end of the market," he explains.
Camerer says targeting this market is part of Cell C's strategy to define its market and find its niche in an environment dominated by major players Vodacom and MTN.
Most stakeholders say the local market has up to a 70% penetration rate. However, firm numbers remain elusive, as there is no agreement as to what makes an active subscriber.
Camerer explains the third mobile operator plans to provide new product offerings that encourage new entrants, with special focus on affordability, he says. It also plans to provide services that bring cost savings to consumers, rather than spend "endlessly on technology".
The move to focus on the entry-level market is key to Cell C's plan to up its subscriber numbers, without having to compete within the saturated high-end, dominated by the other two operators.
Camerer says Cell C expects to double its subscriber base by 2010, going from 3.3 million subscribers, as at December 2006, to 6.75 million.
The company also expects to double its earnings before interest, tax, depreciation and amortisation. However, Camerer would not provide specific financial details on the bullish outlook. However, he adds Cell C's performance is exceeding its management's expectations.
This announcement follows recent reports that the company is not performing well, staff members are resigning en masse, and major shareholders are reconsidering their investments. Cell C was quick to rubbish these claims last week.
Hola 7
As part of its effort to reach the entry-level market, Cell C is partnering with musician, TV presenter and Unicef ambassador Zola to launch Hola 7, a co-branded prepaid starter pack.
The pack, which costs R9.95, offers new customers basic telephony, a single track CD featuring Zola and membership to a loyalty club at no additional cost.
Club members qualify for additional benefits, including tickets to Zola's shows and a meeting with the musician.
In addition to Cell C stores, the Hola 7 offering is available through Shopright Checkers and Pep stores nationwide. Camerer expects the offering to be popular, as the target market recognises the Zola brand and wishes to be associated with it.
He says the Zola initiative is the "tip of the iceberg" with regard to measures Cell C is taking to implement its strategy.
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