Cell C and Telkom will not be around a few years’ time, leaving Vodacom and MTN as the only mobile players. This is the view of David Shapiro, deputy chairman at Sasfin Securities.
Speaking on Business Day TV, Shapiro said that mobile telecoms is simply too capital intensive for new operators to bring competition to the market.
Business Day TV host and investor Simon Brown said that Cell C started the price war, but that the problem with price wars is the big guy always wins.
“You must have big pockets [to compete against Vodacom and MTN], and Cell C never had big pockets,” said Shapiro.
“The fact that they have been around for so long and that they made no real penetration into Vodacom and MTN – it is not going to work,” said Shapiro. “What is suddenly going to swing it around – I cannot see it.”
“And certainly Telkom [Mobile] you can just write off. They [Telkom] have to consider other strategies.”
“My view is that you will not see Telkom [Mobile] or Cell C in a few years. It will only be Vodacom and MTN,” Shapiro predicted.
Strong future for Vodacom, MTN
While market conditions are tough for telecoms operators – due, in part, to declining voice revenues – Shapiro is still bullish on the future of the big operators.
“They [Vodacom and MTN] are going to make lots of money,” said Shapiro, adding that the future revenue growth for mobile operators lies in data.
Shapiro explained that there are now more mobile phones than people in the world, and that these phones are getting smarter and require more data.
“I think these [big mobile operators] are cash cows. These are companies that in time to come will just keep making money,” said Shapiro.