Call termination rate battle - The story of how Vodacom and MTN crushed Cell C before it launched

[Jan]

How Vodacom and MTN crushed Cell C before it launched

Vodacom and MTN ensured Cell C could not compete against them when it launched in 2001 by drastically increasing mobile termination rates.

Fast-forward 23 years, and Cell C is once again fighting for fair termination rate regulations to assist smaller operators.

 

[hj007]

A bit of ancient history. Was there an entity that owned the technology/ cellphones prior to VC & MTN launching in 1994/5? As far as I understand they did 2G first, but there were already some cellphones/company prior to their launch that had cell rights? Was it still incubated in Telkom/Post Office at the time or other private entities?

 

[bixt]

If it costs 0.01 cent to receive , use your towers to transmit the signal, making the call should be similar.

So why did I load R30 MTN airtime (and got R30 free per an sms) on Friday and after just a couple small calls it was kla?

Something is not lekker here.

 

[bixt]

A bit of ancient history. Was there an entity that owned the technology/ cellphones prior to VC & MTN launching in 1994/5? As far as I understand they did 2G first, but there were already some cellphones/company prior to their launch that had cell rights? Was it still incubated in Telkom/Post Office at the time or other private entities?

Like for pagers and stuff. 1G GSM circuit switched, perhaps analog . 2G implies packet switched GPRS.

 

[Calkem]

MTN and Vodacom's strategy didnt work anyway, Cell C managed to become quite huge, everyone wanted to be on their network.

I dont know what happened, but it just lost favour amongst everyone in the past 12 years, a steady and sure-footed decline

 

[Swa]

MTN and Vodacom's strategy didnt work anyway, Cell C managed to become quite huge, everyone wanted to be on their network.

I dont know what happened, but it just lost favour amongst everyone in the past 12 years, a steady and sure-footed decline

It was more about supporting the little guy. The issue is Cell C could never effectively keep competing against MTN and Vodacom while maintaining the bottom line so they tried to get families on their network with some quite impressive on net rates. It might have worked but with no portability a lot of people couldn't jump ship and kept their other numbers. When Icasa finally implemented MNP it was too late and Cell C was in a decline with a network that couldn't match MTN or Vodacom and instead relied on them.

It is a regulatory ballsup of note. In many countries interconnect rates are so skewed for entering or small networks that they can have off net rates that the established ones can't begin to compete with. When Icasa clamped down on interconnect rates they unfortunately also reduced them to such an extent for Cell C that they made up an insignificant portion of their revenue. The writing was on the wall when Cell C stated they weren't going to roll out 3G. It wasn't that they thought of it as a fad and while many people criticised them for it Cell C's point was they couldn't justify the expense of rolling out an entire network for a transitioning technology that would just blow over.