Cell C sells cellular tower infrastructure

Looks like Cell C is playing to be the biggest and best in this department.
 
Sounds like a Sale-and-Leaseback.

Releases cash for other development.

There are some FX risks, however.
 
Now it looks like Cell C is really serious about their 97% coverage by end of next year! Yay to the little guy who's always been ignored by eMpTyN & Vodascum all these years.
 
Brave move by Cell C, aand definitely the right way to go. Eventually in 10 years time, all towers will be owned and maintained by companies like this, and operators will just lease the space, and provide backhaul.

Cell C were smart being the first to sell it's assets - they will receive the best price for their assets. If and when VodaScum/eMpTyN/Hellkom follow suit, they will not be be able to get the same price, and will not be able to sell all their sites. American Tower corp is not gonna buy a 2nd and 3rd tower that is a few hundred meters or even a kilometer away (depending on various factors, obviously)

Then again, American Tower Corp might get some competition from another infrastructure company willing to buy from VodaScum, eMpTyN or Hellkom.
 
First Afrihost with their capped, then MWEB with their uncapped, now Cell-C with their 3G++. It seems that old saying 'fortune favors the brave' is true, especially in ICT.
 
looks to be a brilliant move. i would imagine that - in addition to raising much needed cash, cellc would have SLA's in place to guarantee uptime and performance at the towers. i would also imagine that the company buying the towers would also take on cellc's employees whose job it was to look after the towers?
 
ingeon said:
I understand they need the money, but I would rather own it.
In the long run it`s always better to own than rent :whistle:
Click to expand...

Not if it means rapid expansion and growth in customer base.
 
From a corporate point of view, certain types of "assets" are much better if they're rented.
 
I find this a very interesting development in light of their previous securing of a credit line from a Chinese development bank. It seems that CellC is determined to make sure that they build a big network infrastructure in the most cost effective way without running into ownership issues with ICASA.
 
From a corporate view this is the way forward for Cellular telecom players, frees up capex significantly so that Cell C concentrates on being more consumer-centric rather than having the headache of running a network. Agreements will obviously be in place in terms of network quality, but once they're running on average tenancy of 2 or more operators on towers operating costs drop significantly.

Given space constraints, spectrum licensing etc tower sharing is the optimal model for telcos. This model has been used in Europe and the US fro years, so MTN & Voda have definitely been very complacent about this!


Well done Cell C!
 
I do not echo the general consensus here. I think it is a bad move.

If someone else can do something cheaper than you, then it reflect badly on leadership. In the long run, the cost will be more. If you want to keep the costs down, rather do tower sharing wit another telco. With 8ta just launched, it might have been a good idea, especially if they could also share 8ta towers.

And talking about SLA: the better SLA the more the cost of the SLA.

I have yet to see where outsourcing rally worked. Perhaps I am just a pessimist, but I have seen it multiple times, and have seen it failed multiple times.
 
Doesn't !CASA need to rubber stamp this, and what about municipal permission to own and operate base-stations when the company is USA-based?

I think I've lost CellC's plot on this one.
 
What I would love to see is a map of future Cell C 3G coverage expansion in the county.
 
zamicro said:
I do not echo the general consensus here. I think it is a bad move.

If someone else can do something cheaper than you, then it reflect badly on leadership. In the long run, the cost will be more. If you want to keep the costs down, rather do tower sharing wit another telco. With 8ta just launched, it might have been a good idea, especially if they could also share 8ta towers.

And talking about SLA: the better SLA the more the cost of the SLA.

I have yet to see where outsourcing rally worked. Perhaps I am just a pessimist, but I have seen it multiple times, and have seen it failed multiple times.
Click to expand...
Not so much a bad move (although it is) but more a desperate one.

You're 100% right that outsourcing, at worst, does not work and, at best, cost more than to do it in-house, typically about 20 to 30% more than the in-house cost.

Cell C desperately needs cash, they're in massive debt with little prospect to recover it from their mobile network.

This sell and lease model will give them short-term cash but it will cost 20 to 30% more to lease back. Eventually it will catch up with them. Guess the rationale is to just survive now at any cost (even it it means selling a valuable asset and renting it back.) and later figure out how to make money.

But it a model doomed to fail. Cell-C is still building their network, so there is no 'spare capacity' to sell to push up margins. The only way out for them is to increase pricing or to sell value added services.

But SA consumers will not tolerate price increases and there are no real new services for them to sell.

While I really feel sorry for the Cell C CEO (he's got his back against the wall, through no fault of his making, with massive debt crippling the company), the actions we now see from Cell C only shows the desperation the company is in.

- They're running at a loss on the voice side - thus no cash cow.
- They enter the data market very late - at a massive cost.
- To get traction they have to sell at, or below, cost with no real prospect of putting up pricing.
- They have to sell off company assets (towers) to get short-term cash knowing well it's going to cost them in the long run.

These are all clear indicators of a company fighting for survival. But at least they're fighting, unlike the other players (such as Neotel and iBurst) who just seem to have given up.

I really hope it works out for Cell C, but it may be too little, too late.
 
These are all clear indicators of a company fighting for survival. But at least they're fighting, unlike the other players (such as Neotel and iBurst) who just seem to have given up.
Click to expand...

CellC has undergone a renovation. Their CEO sees the future, where operators are admins of bitpipes. VC and MTN kind of companies are fighting tooth and nail to keep VoIP off their handsets since it will pretty much place voice revenue in the same basket as data. Think 20c/minute calls. But handsets will get VoIP.

Im running Android Froyo with skypeOUT. At home and work i make 23c phonecalls to any cellphone using WiFi. Since i got this phone.. my bill went from R1200/month to about R400. LoL.
 
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