[Arg computer crashed while posting so rewriting from memory]
Unless you are a CellC shareholder or holder of unsecured debt in CellC this isn't "bad news"
Lets look at the table: The VAT component is much of a muchness with lower tariffs meaning less VAT proportionately however the tax man looses money to the benefit of the consumer (and to the benefit of uptake and potentially the operators). The distribution component is placed as constant but this covers the core costs so CellCs infrastructure (and roaming with Vodacom) is covered which means that the real change before CTRs were affected is that CellC gets 1.01c per minute and there are more minutes on the CellC network.
Now MTN reducing the tariffs on all-net calls rather than on-net calls increases the calls made to CellC - which means they benefit from an inflow of revenue from MTN (and provided they actually put this revenue into network operations is good) and causes MTN to be reducing the price of communications and basic demand will increase the call volumes (so even if revenue remains constant there are more minutes being bought so more money into network building - and hopefully network building on the data side). For MTN to be providing a tariff below there own cost to provision (which remember is higher because of asymmetry) would be illegal under our competition laws and they will no doubt in the long run be nailed. If MTN SA are playing the game Telkom attempted a few years ago they will - to the annoyance of MTN group - quickly find themselves in deep trouble and will probably face a wholesale / retail type split (despite the merging of stuff last year).
If CellC cannot sustain the price war they've started then so be it. The assets of CellC can be bought up (and have largely already been unloaded) and Telkom Mobile will simply step up a bit and room for other operators will increase. The real challenge is regulatory barriers to operate as an MNO and currently that is less of an issue with the overall licensing landscape. A failed CellC could well be bought up by a VoIP provider or group of VoIP providers and ISPs.
The bigger challenge for CellC really is what happens at the end of these 6 months of some certainty but MTN and Vodacom have the same challenge and need to start thinking about the situation with a little more care than they have. The horribly misguided legal challenge probably sliced about two months of time which should have been spent on more profitable activities and introduced a lot of animosity and bad blood.
I do think that this is a Dick move by MTN (both in the conventional sense and as a reference to being like Nixon
) but ultimately we need to look at the big picture and a lot of consequences to the move. To simply say that MTN is slicing off 18.9c of the revenue per minute which CellC has to put their finances in order looses sight of the fact that the CTR change causes the total revenue to CellC to increase and if they were unable to have adequately put their finances on realistic revenue inflows then they really can't survive.
