Vodacom\u2019s chief executive, Shameel Joosub, has described the offer as gimmicky but Cell C\u2019s boss, Jos\u00e9 dos Santos, said this week \u201cthe take-up has been exceptional\u201d.<\/p>\n
Following Cell C\u2019s offer,\u00a0researchICTafrica.net<\/em><\/a>, a nonprofit public research network, amended a recently published policy brief that assessed the value one gets for a monthly subscription price in terms of bundled minutes, SMSes and data.<\/p>\n In its assessment of the first quarter of the year, Cell C provided the best average value.<\/p>\n Surprisingly, by launching its Epic products, its overall value was dragged down.<\/p>\n In May, Telkom mobile provided the best average value to its customers.<\/p>\n Postpaid value index<\/strong><\/p>\n The researchers used a measurement called the postpaid [aka contract] value index (PVI), which assesses the value of products offered by network operators. It does not take into account out-of-bundle rates or handsets.<\/p>\n Although the PVI found Cell?C\u2019s Infinity Select contracts and SmartChat 1GB offer to be the best value for customers in particular price ranges, the authors describe Cell C\u2019s buy-out offer as \u201ca bit sanctimonious\u201d, given that the operator itself increased contract subscription prices early this year.<\/p>\n \u201cFurther, the low PVIs of the Epic product range show that switching customers may actually not get a much better product.\u201d<\/p>\n Safia Khan, one of the researchers, said: \u201cCell C bundle offerings are really good, but the Epic bundle is just airtime \u2013 there are no bundled SMSes or data [apart from one, Epic Infinity]. When you hear R10\u00a0000, you get very excited, but it is important for consumers to be aware that it\u2019s on condition you take one of their lowest-value offerings.\u201d<\/p>\n Dos Santos said researchICTafrica.net<\/em>\u2018s analysis of the Epic plans took into account only the monthly subscription value and not the cash-back buy-out value. He insisted the packages were competitive.<\/p>\n Constant criticism<\/strong><\/p>\n Cell C is consistently criticised for its network coverage and quality.<\/p>\n \u201cWith contracts, Cell C are targeting a high-end customer, but why on earth would they go to a network with such poor quality?\u201d said a telecommunication company analyst, who did not want to be named. \u201cProductive sectors of the economy can\u2019t afford to go with Cell C.\u201d<\/p>\n Cellphone contract war<\/p><\/div>\n A 2013 study conducted by the Independent Communications Authority of South Africa (Icasa) found that, in Johannesburg, Cell C had the highest dropped call rate \u2013 8% \u2013 compared with MTN\u2019s 5% and Vodacom\u2019s 2.9%.<\/p>\n Richard Hurst, a senior analyst at Ovum, said Cell C needed to keep it \u201clean and mean\u201d in terms of coverage. \u201cThey are marketing themselves to the cost-conscious consumer. That is where they are going.\u201d<\/p>\n Dos Santos said Cell C had invested significantly in its network coverage and capacity.<\/p>\n Capital investment<\/strong><\/p>\n That included a combined capital investment of more than R4-billion during the 2014 and 2015 financial years. More than 1\u00a0350 3G sites were planned, and additional projects were underway in various provinces to enhance network quality and stability.<\/p>\n He added that Cell C had also signed deals worth R8-billion with Huawei and ZTE to roll out LTE across the network over the next three years.<\/p>\n ResearchICTafrica.net<\/em> said Vodacom was the telecommunications company that was currently investing the most. It had spent R30-billion over the past four years.<\/p>\n \u201cThe increased investment by Vodacom is good news for consumers and the price hikes may be worth it for the increased quality of service,\u201d it said.<\/p>\n Khan added: \u201cBut that doesn\u2019t mean a subsection of customers must bear the brunt.\u201d<\/p>\n Customer base<\/strong><\/p>\n MTN has seen its customer base grow over the past five years, but revenue for the past three financial years has dropped.<\/p>\n ResearchICTafrica.net<\/em>\u2018s brief said its operating and capital expenditures had decreased too.<\/p>\n Hurst said one of the key issues was the regulatory environment and whether Icasa would flex its muscle to allow competition to flourish.<\/p>\n \u201cWe have seen bits of it with the arrival of the asymmetrical interconnect rate, which is designed to let smaller operators compete. But there is still a whole host of other things the regulator can do for smaller guys to flourish and gain a foothold in the market.<\/p>\n \u201cCell C is in danger of long-term failure. I can\u2019t see how they can continue to keep this up,\u201d the anonymous analyst said.<\/p>\n \u201cEven in big markets around the world, companies are consolidating. They have realised they made a mistake \u2026 a small market like South Africa, at the end of the day it can\u2019t sustain four players. But I suppose as long as the [Cell C] shareholders can foot the bill they\u2019ll carry on.\u201d<\/p>\n Revised interconnect rate<\/strong><\/p>\n Dos Santos would not comment on the benefit of the revised interconnect rate, but said Cell C had exceeded its revenue and Ebitda (earnings before interest, taxes, depreciation and amortisation) targets for the first quarter of 2015, and was on track to deliver on its business plan.<\/p>\n \u201cThe company\u2019s financial position has significantly improved,\u201d he said.<\/p>\n Vodacom reports a subscriber base of 32-million, MTN about 26.7-million and Cell C nearly 18-million.<\/p>\n On Device Research last year estimated that mobile penetration was 133% in South Africa.<\/p>\n Source: Mail & Guardian<\/a><\/em><\/p>\n Vodacom price increases: who was wrong?<\/a><\/strong><\/p>\n MTN, Vodacom contract price hikes unjustified: report<\/a><\/strong><\/p>\n![\"Cellphone](\"http:\/\/mybroadband.co.za\/news\/wp-content\/uploads\/2015\/05\/Cellphone-war.jpg\")
<\/a>More on cellular<\/h3>\n