{"id":61324,"date":"2012-10-07T13:20:56","date_gmt":"2012-10-07T11:20:56","guid":{"rendered":"http:\/\/mybroadband.co.za\/news\/?p=61324"},"modified":"2012-10-07T13:23:41","modified_gmt":"2012-10-07T11:23:41","slug":"selective-memory-from-cell-c-ceo","status":"publish","type":"post","link":"https:\/\/mybroadband.co.za\/news\/columns\/61324-selective-memory-from-cell-c-ceo.html","title":{"rendered":"Selective memory from Cell C CEO"},"content":{"rendered":"

People who live in glass houses shouldn\u2019t throw stones. But Alan Knott-Craig<\/a>, founder and former CEO of Vodacom<\/a> and current Cell C<\/a> boss, seems to be intent at heaving rocks at a glass house: one that he built!<\/p>\n

In a recent interview with Techcentral, Knott-Craig criticises Vodacom and new CEO Shameel Joosub<\/a> for its reaction to Cell C\u2019s 99c per minute international call tariffs. Vodacom was set to launch its response, an 89c per minute deal to 51 destinations on Monday but had to postpone it at the last minute due to worries over its billing system.<\/p>\n

It’s Vodacom\u2019s R5 activation fee that drew the sharpest criticism from Knott-Craig.\u00a0\u201cWhy [force] opt-in? Opting in is like opting out. If you are serious, give it to everyone. Why pay R5? You\u2019ve screwed [customers] long enough. Let them keep their R5,\u201d he told Techcentral.<\/p>\n

In fact, Knott-Craig\u2019s been particularly vocal in the past fortnight,\u00a0flinging\u00a0rocks\u00a0at\u00a0whomever\u00a0he can. Interviews are peppered with jabs, particularly at Vodacom. This is no surprise, given that he knows the business inside out.<\/p>\n

But his competitors know as much about him. Joosub was hired by Knott-Craig, worked for him for 13 years, and surely knows his weaknesses? Karel Pienaar<\/a>, MTN<\/a>\u2019s South African MD was the other pioneer, at the time that the two cellphone companies emerged in the early nineties. He also knows where Knott-Craig and Cell C are vulnerable.<\/p>\n

It\u2019s not as if his tenure at Vodacom from 1993 to 2008 was all roses. The serious animosity between the top brass at Telkom (then 50% shareholder) and Vodacom is legendary, especially in the mid-to-late 2000s.<\/p>\n

Since joining Cell C, Knott-Craig has continually slammed his rivals\u2019 tariffs. Another dig from the Techcentral piece: \u201cWe must be the highest-margin telco country in the world.\u201d<\/p>\n

There\u2019s selective memory at play here. Tariffs (especially voice charges) remained stubbornly high for over a decade until a few years ago. Who\u2019s fault is that?<\/p>\n

Suddenly, after he\u2019d left Vodacom in 2008, Knott-Craig became vocal about interconnect tariffs. This public debate in 2009 saw him sitting on the sidelines slamming the rates.<\/p>\n

But, here again there\u2019s smoke and mirrors. Soon after the licensing of Cell C \u2013 and before its launch \u2013 Vodacom (under Knott-Craig) and MTN successfully lobbied Icasa to raise interconnect rates to R1.25 per minute. This meant that at its launch in 2001, Cell C was already hamstrung and has found it nearly impossible to compete with its entrenched rivals ever since.<\/p>\n

He\u00a0defended Vodacom\u2019s inaction\u00a0(from the sidelines) in 2009: \u201cI mean, in the last years that I spent at Vodacom I think I budgeted every single year for Icasa to cut that interconnect, and they never did. Yes, my shareholders would say “happy days”.\u201d<\/p>\n

In an\u00a0interview with MyBroadband, also in 2009, he states: \u201cI have\u00a0never changed my mind on interconnect rates. My position has been the same since 1993. Mobile terminating rates should be based on cost plus a fair profit.\u201d There\u2019s no explanation of the sudden jump in interconnect just before Cell C\u2019s launch in 2001.<\/p>\n

Vodacom had the most to lose from a drop in interconnect rates, and Knott-Craig is na\u00efve to assume no one else knew that. In the first six months following the drop in interconnect rates, Vodacom saw R800m in revenue evaporate. One wonders what Knott-Craig\u2019s position would\u2019ve been had he still been in the Vodacom CEO\u2019s chair at the time of these changes. Behind the scenes both operators fought tooth and nail to retain the status quo, before Icasa<\/a>\u2019s ruling on interconnect in April 2010.<\/p>\n

Even today, he remains critical of the glide path for mobile termination rates imposed by Icasa, arguing for asymmetrical rates which would benefit a smaller operator (like Cell C).<\/p>\n

There are any number of other missteps at Vodacom. The aborted entry into Nigeria, the iBurst acquisition, Vodacom Business Yebo Radio, the list goes on. But, under Knott-Craig, there were perhaps even more successes at Vodacom. That\u2019s precisely the point. Every chief executive has failings and successes. They just need to make sure they have more successes than failures and that they\u2019re remembered for the good parts. It\u2019s easy to fling mud at others, especially if you know everything about that company. And it\u2019s even easier to be selective about what you criticise and how.<\/p>\n

Knott-Craig is a ferocious competitor, that\u2019s for sure. We should be thankful that executives of his calibre (and Lars Reichelt<\/a> before him) took the bold steps at Cell C that have made the mobile industry infinitely more competitive than it was two years ago.<\/p>\n

And there\u2019s more to come. By the end of next year, mobile voice, SMS and data tariffs will be unrecognisable from what we\u2019re paying today. The competitive landscape too will look different. Over the next year or two, the market share of Vodacom, MTN and Cell C will morph from the current 50\/35\/15 (round numbers) to a situation of 40\/35\/20\/5 (again, round numbers, with 8.ta taking a small share of the market by then).<\/p>\n

Joosub at Vodacom and Pienaar at MTN are more than up for Knott-Craig\u2019s fight.<\/p>\n

This is great for consumers. And for that we should be thankful.<\/p>\n

But please Alan, tone down the sabre-rattling a little.<\/p>\n

Source: Moneyweb<\/a><\/p>\n

Related articles<\/h3>\n

You\u2019ve screwed customers long enough, Knott-Craig tells Vodacom<\/strong><\/a><\/p>\n

We offer the best value for money: Cell C CEO<\/strong><\/a><\/p>\n

Cell C broadband network details<\/strong><\/a><\/p>\n

Former Vodacom CEO speaks out on lower interconnect rates<\/strong><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Vodacom has “screwed customers long enough”… Except, Mr Knott-Craig, there\u2019s just one problem…<\/p>\n","protected":false},"author":75,"featured_media":41681,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[21],"tags":[681,355,35,41],"class_list":["post-61324","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-columns","tag-alan-knott-craig","tag-cell-c","tag-headline","tag-vodacom"],"_links":{"self":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/61324"}],"collection":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/users\/75"}],"replies":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/comments?post=61324"}],"version-history":[{"count":1,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/61324\/revisions"}],"predecessor-version":[{"id":61496,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/61324\/revisions\/61496"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/media\/41681"}],"wp:attachment":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/media?parent=61324"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/categories?post=61324"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/tags?post=61324"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}