Telkom is catching up to Cell C

Cell C is the latest South African mobile operator to reflect a decline in its active mobile subscriber base.

Both Vodacom and MTN’s mobile subscriber counts fell earlier this year, discounting telemetry and enterprise subscribers.

Telkom was the exception, however, as it saw extremely impressive user growth over its past financial year. The operator’s mobile subscribers saw a year-on-year growth of 85.9% which brought it up to 9.7 million users.

This rapid growth has seen Telkom quickly catch up to the smallest of the other three operators – Cell C.

Major mobile operators like MTN and Vodacom are losing customers and revenue due to the implementation of new regulations by the Independent Communications Authority of South Africa (ICASA) designed to protect consumers from predatory out-of-bundle (OOB) spend.

A considerable portion of both MTN and Vodacom’s revenue originated from OOB billing, and these new regulations have subsequently begun to somewhat stifle these networks’ growth.

Cell C now has only around 4 million subscribers more than Telkom, placing it squarely in the sights of the smaller operator.

Cell C turnaround

Cell C has bigger problems than a stagnant subscriber base, however, as the company posted a loss of R8 billion in its most recent financial results.

The company has shut down its fixed-LTE offering through Internet Solutions, expanded its roaming agreement with MTN, and scaled back investment in its Black streaming service to aid its financial position.

Cell C CEO Douglas Craigie Stevenson also has a turnaround plan to revive and streamline the business.

“Cell C has definitely not stagnated, we are generating service revenue,” Craigie Stevenson said. “We are getting rid of costs, getting more efficient, and understanding what a performance culture is all about.”

Telkom undoubtedly has a better financial profile and greater subscriber growth than Cell C, the latter of which states that it has now reached 16 million active users.

However, after excluding broadband, wholesale, MVNO, and business service provider customers, Cell C is left with a total of 13.6 million subscribers.

We compared the real customer base of Telkom, MTN, Vodacom, and Cell C according to their latest published trading results.

Mobile subscribers

Vodacom’s trading update for the quarter ended 30 June 2019 shows it now has a total of 43.8 million customers in South Africa, comprising 37.9 million prepaid and 5.9 million contract customers.

MTN’s interim results for the period ended 30 June 2019 reflected that it has a local mobile subscriber base of 29.2 million subscribers, which works out to 26 million customers after deducting the operator’s telemetry subscribers.

Cell C’s latest financial results reflect 16 million South African customers, which works out to 13.6 million after deducting MVNO, business, wholesale, and broadband subscribers.

Telkom’s financial results for the year ended 31 March 2019 showed that it had a total of 9.7 million mobile subscribers.

Network Prepaid Postpaid Total
Vodacom 37.9 million 5.9 million 43.8 million
MTN 23.3 million 2.7 million 26.0 million
Cell C 12.5 million 1.1 million 13.6 million
Telkom 7.8 million 1.9 million 9.7 million

Now read: Cell C has a great future – Blue Label

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Telkom is catching up to Cell C