In May, Cell C announced that it had “entered into a far-reaching roaming agreement with MTN to complement its own high-quality network”.
Cell C has essentially selected MTN in preference over Vodacom, which has been offering 2G and 3G roaming to Cell C subscribers since 2001.
MTN will provide 3G and 4G services to Cell C in areas where Cell C has chosen to purchase coverage rather than self-build – mainly outside of main metro areas.
This may seem like a business decision with no major impact on Cell C subscribers. This is, however, far from the truth.
In fact, this is the best news from Cell C regarding its network since it launched HSPA+ in 2010.
What this means, in simpler terms, is that Cell C subscribers will now get a world-class network experience across South Africa.
One of the biggest benefits of this deal, Cell C CEO Jose dos Santos said, is that it increases their 4G population coverage from 33% to 80%.
Thanks to advances in roaming and network sharing technologies, Cell C subscribers will not even know that they are roaming on MTN’s network, and seamless handover will prevent any dropped calls when switching between Cell C and MTN’s networks.
Cell C can now invest where it makes sense
This agreement with MTN means Cell C can focus its network investments in the metropolitan areas where most high-end customers reside.
Cell C cannot compete with Vodacom and MTN in terms of network investments, which range between R7 billion and R10 billion each per year.
This roaming agreement allows Cell C to neatly sidestep this hurdle and focus its investments to the highest demand in large cities, some cherry-picked secondary cities, and large towns.
This strategy is already paying off, and MyBroadband’s drive tests have revealed a large improvement in Cell C’s network performance in certain areas.
In some parts of Gauteng, Cape Town, and Durban, for example, Cell C’s network is on par with Vodacom and MTN’s performance.
MTN and Cell C mum on the details of the agreement
While Cell C subscribers will definitely benefit from the new roaming agreement with MTN, the financial benefit to the company remains to be seen.
The exact terms of the agreement are a closely guarded secret, and neither company wants to comment on it.
Jacqui O’Sullivan, executive for corporate affairs at MTN SA, told MyBroadband that, because Cell C is a client of MTN, they prefer “not to speak on behalf the customer”.
Cell C spokesperson Karin Fourie said the specifics of the agreement, including the various pricing structures, are confidential.
In a recent interview with Business Day TV, Wayne McCurrie from FNB Wealth and Investments said the Cell C-MTN deal is “not roaming”.
He said that Cell C reached an agreement to purchase or rent 20% of MTN’s network capacity for a set yearly amount.
With this agreement, there is no marginal cost to Cell C for using MTN’s network, McCurrie said.
This means that Cell C can “load the system at lower prices than other people and be competitive”.
However, Fourie told MyBroadband that Cell C acquiring a percentage of MTN’s 3G and 4G capacity is not correct.
Instead, Cell C has entered into an agreement to roam on the MTN network, Fourie said.
“Importantly, this roaming agreement is linked to specific predetermined sites and is not a national roaming agreement,” she said.