MTN losing market share to Cell C

JSE-listed Blue Label Telecoms on Wednesday (19 February) provided a breakdown of its prepaid airtime distribution for the country’s major operators, revealing a change in market dynamics.

Blue Label’s core business is the virtual distribution of secure electronic tokens of value and transactional services, including prepaid airtime vouchers.

In reporting its interim results for the half year ended November 2013, Blue Label noted that MTN lost 4% market share in terms of prepaid airtime revenue to 32%, from 36%, with Cell C adding 5% to 17% through to November 2013.

This represents a 11% decline in revenue share for the yellow network, while Cell C climbed over 40%.

Vodacom meanwhile, slipped one percentage point, to 50%, with Telkom stagnant at 1%.

Revenue Growth by Network

In audited results for the year ended May 2013, Blue Label noted that Cell C had gained traction in the market regarding prepaid airtime sales and starter packs, up 2% to 12% in terms of contributions to Blue Label’s revenue in the segment.

Vodacom accounted from 51%, unchanged from the prior period, while MTN slipped 2% to 38% of revenue.

Blue Label joint CEO, Brett Levy said that South Africa consumers were generally lethargic when it comes to adopting change, “but when they do, it happens very quickly”.

In November, acting CEO at Cell C, Jose Dos Santos, said that the operator had hit 13 million subscribers for the first time.

In September, Alan Knott-Craig said that Cell C’s subscriber base had grown 33% to 12.3 million customers in just 18 months. Knott-Craig is recovering from a stroke.

In July 2013, Cell C revealed that it had 11.7 million subscribers on its network – a steady climb from 8.2 million users in 2011 and 9.4 million in 2012 – boosting its relative market share to over 17%.

Knott-Craig has said that the company is targeting 25% market share in order to be profitable.

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MTN losing market share to Cell C