And unlike Neotel, they already have a consumer distribution network, and they already have a subscriber base.
Excellent news. Wonder when they'll offer coverage in plett
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Not to be negative, but I just suspect that the Gauteng 'switch on' will give Cell-C some problems, I don't have full confidence in Cell-C yet. I wonder if they've covered all bases. I hope all goes well though.
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Patiently waiting for the jhb launch..
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You can lead with a loss-leading product but it then follows that you must be able to sell something extra because of this and this something extra is where you then make your money.
But this is precily what I'm asking. What is this 'thing' Cell-C is going to sell to make them money?
Vodacom and MTN can sell data a no or even negative margins as they have this massive cash-cow called 'voice'. Cell-C don't have such a cash-cow, have massive debt to repay and then they come in with these below-cost pricing.
It's ballsy, but will it work? I fail to see the strategy here.
But their cash-upfront pricing model is counter-intuitive to servicing this base. In other words, the traditional Cell-C consumer is not the guy that will slap R3000 cash down. As a matter of fact, very few people would.
So while getting your cash up front is very clever of Cell-C, I wonder how many people have actually parted with so much money. I suspect, very few.
We should ask the mods to run a poll.
Why are you so sure that this is a loss leader? At R50 a gig this is still well above what you would pay for bandwidth from a traditional ISP, while thier actual backhaul costs are probably not that much higher than traditional fixed line ADSL. It is the R2000 a gig out of bundle pricing in this country that is mental, not Cell C.
You can't fix crazy by abandoning reason. Then you're both just crazy people screaming at each other.
Um, what about top-ups? once users get hooked on 21mbps and their bandwidth run out they will be queueing up to by top ups at +/- R50 a gig. that way Cell C makes approx. R40 on each top up. If they didnt offer fast enough speeds to begin with then not that many people would burn through their data before the end of each month.
i agree. im gonna use a cellc sim in mobile as well. Thats business they wouldn't have had otherwise.
You see - if you are locked in for 12 months to Cell C then you have no choice but to buy top-ups when you run out. I think its down right diabolically clever. Build a fast network - lock people in for 12 months - give them enough gigs to seem reasonable- wait for the gigs to get burned up- ching, ching, ching ching as we all start buying "cheap" gig top-ups. (at least a lot cheaper than the other networks)
For those who think Cell C selling their broadband service at cost, I totally disagree! They have done their stats and know what they are doing. Among the 3 operators, it would be more suicidal for them as their financial position is not very stable.
My view for leaving Gauteng to last is a strategic move by Cell C. They have to test the waters in areas that have less demand so that they don't over stretch the network and result in unsatisfied customers. If they started with Gauteng and for some reason the network collapsed, the forum would be posting negative sentiments about Cell C which could make it diffucult for them to gain market share.
It also makes business sense for Cell C to provide broadband services to fishermen when they are at sea...lol!