South Africa’s fourth-biggest mobile operator, Cell C, is looking to roll out 5G connectivity in the “next couple of months”.
So said Jorge Mendes, CEO of Cell C, yesterday in an interview with ITWeb after the mobile network operator’s majority shareholder Blue Label Telecoms announced its financial results for the six months ended 30 November 2024.
Cell C, which has had financial troubles over the years, is also looking to accelerate its mobile virtual network operator (MVNO) business to become a going concern, said Mendes.
He revealed that during the reporting period, Cell C’s total revenue was up 13% to R6.7 billion, while mobile data traffic shot up by 27%.
According to Mendes, the MVNO business witnessed growth of 27% in the six-month period and the average revenue per user increased by 14% to R102.
A late entrant in the 5G race, Cell C’s announcement comes after most mobile operators have already lit up the next-gen connectivity technology.
According to a recent report by Africa Analysis, South African mobile network operators are steadily ramping up 5G network deployment.
As of December 2024, Africa Analysis says, over 50% of the South African population had access to 5G networks, marking a milestone in the sector’s development.
The market analyst firm projects that 5G population coverage will reach 60% by December 2025 and 13% penetration of the mobile base, up from 9.1% in December 2024.
In September 2019, mobile network operator Rain became the first telco to activate a commercial 5G network in Africa. Vodacom and MTN switched on their 5G networks in 2020, while Telkom launched in 2022.
Roaming agreements
“We haven’t launched 5G yet and that’s coming in the next couple of months, and we are also driving voice over LTE,” said Mendes.
“Both the government and the private sectors are now starting to come to us asking about business opportunities. So, there is positivity flowing into the market.”
Cell C does not own a mobile network but roams on the networks of Vodacom and MTN, which have had a head start in rolling out 5G.
The mobile operator recently restructured its roaming arrangements with Vodacom and MTN.
Said Mendes: “When we agreed on the new roaming structure, we created a phased approach to some of these services because this investment required the roaming partners to unlock this [5G] capability for us.”
Cell C has a very specific agenda around 5G, he noted.
“I know it might sound like ‘what’s the big deal because everyone has had it for a while?’ We have some unique things that we want to do with it.
“For us, it’s about making sure consumers have a like-for-like comparison. Imagine that we have the best network experience for video and it’s only 4G. So, when we start unlocking 5G, we will have another opportunity to impress customers further.”
A recent report by Opensignal shows South Africans enjoy the best quality of on-demand mobile video streaming experience on Cell C’s network.
However, Mendes said it’s difficult to monetise 5G. “That’s why I am saying it’s not a revenue uplift, but a competitive positioning move to tell customers that this should be another reason they should be with us.”
Deliberate MVNO plans
Cell C is also looking to take advantage of the expected growth in South Africa’s MVNO space, said Mendes.
The company was the first operator in the country to host MVNOs on its network, and significantly contributed to the diversification and competitiveness of the country’s mobile telecommunications market, offering consumers a broader range of services and pricing options.
According to a recent report by market analyst firm BMIT, the local MVNO market will continue to outpace that of mobile operators for some time to come.
BMIT expects the market to grow from around 4.8 million active subscribers at the end of this year, to 11 million to 12 million by 2029 − representing a compound annual growth rate of 18%.
“The MVNO business is well-positioned to continue competing in the market. We have got significant and deliberate plans to grow the MVNO business and this includes improving our existing partnerships,” Mendes said.
“There are some additional partnerships that have been onboarded and continue to be onboarded.”
He added that the company’s capex-light model and its Multi-Operator Core Network (MOCN) platform are the driving forces behind the projected MVNO growth.
MOCN roaming allows a network operator to provide access to a single radio access network by other operators.
“This will enable us to meet the demand from MVNOs, coupled with good pricing that will enable them to compete directly.
“We have reshaped that business and improved some systems to enable MVNOs in this space. It’s boding quite well and it’s super-busy at the moment with onboarding a number of customers. We are really buoyant about the growth in the MVNO space. This also comes with a deep understanding of the customer to make it win-win, as well as deep integration into their own businesses.”
This growth is mostly being witnessed within the financial services sector, such as banking, as well as retail, he commented.
“However, it’s not only limited to those sectors, but it’s increasing quite nicely and it’s not inconceivable that in the near future, we will have enterprise customers.”
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