Cell C is urging regulators to carefully assess whether the proposed merger of MTN and Telkom lessens competition.
Douglas Craigie Stevenson, Cell C CEO, says the proposed merger between MTN and Telkom should be seen in the context of a “changing telco industry that is faced with complex market dynamics”.
MTN, the largest telco on the continent, and Telkom told investors on 15 July that they had entered into discussions in relation to “MTN acquiring the entire issued share capital of Telkom in return for shares or a combination of cash and shares in MTN”.
Craigie Stevenson says there is an unavoidable shift in the market, which has placed infrastructure developers like MTN, Vodacom and Telkom on one side, with the likes of Cell C as infrastructure buyers on the other side.
This situation, he says, is what regulators need to consider when scrutinising the MTN and Telkom proposed merger.
“The old simplistic structure of the telco market has been split into two, with developers of telco infrastructure on the one hand and buyers of infrastructure on the other hand.”
With the shift, it is important for authorities to consider wholesale regulations for infrastructure developers to increase competition, he notes.
“This is achieved through the removal of one of the biggest barriers to entry plaguing smaller/newer entrants to the mobile network operator (MNO) market − being infrastructure.”
Cell C has been advocating for infrastructure sharing for some time, saying it doesn’t make sense to continue spending billions on infrastructure, as it would rather be focusing on being customer-centric, as opposed to being network-centric.
According to Craigie Stevenson, as a result of the shift in the market, Cell C has already transitioned, which allows it to compete on a like-for-like basis with other telcos.
He says the company is leveraging advances in technology, specifically Multi-Operator Core Networks (MOCN).
“It is important to note that MOCN is different to traditional roaming. With MOCN, Cell C remains in control of its network quality; continues to control network coverage; uses its own spectrum on the virtualised RAN [radio access network]; has its own IMSI [international mobile subscriber identity] range; has its own core data, voice and transmission network; and has its own billing platform.”
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