Douglas Craigie Stevenson, Cell C CEO. Picture: SUPPLIED
Douglas Craigie Stevenson, Cell C CEO. Picture: SUPPLIED

SA’s third-largest mobile network operator, Cell C, said on Monday it has concluded the long-negotiated expanded roaming deal with the second-largest operator, MTN.

Cell C and MTN have been in talks for some time. The network headed by new CEO Douglas Craigie Stevenson already has access to MTN’s network in areas where it does not have coverage, after recently moving away from Vodacom in favour of MTN’s infrastructure.

Last year, Cell C and MTN entered into an initial agreement that provided 3G and 4G services in areas outside the main metros. The expanded roaming agreement extends this coverage and gives nationwide roaming to Cell C subscribers, the operator said.  

The roaming agreement will cause Cell C’s 4G network coverage to be extended to 95% of the population. Cell C customers will have access to more than 12,500 sites, of which 90% are LTE enabled.

“This is a pivotal step in Cell C’s turnaround strategy,” Craigie Stevenson said.

“One of the key pillars of this turnaround is to implement a revised network strategy that enables Cell C to manage its network capacity requirements in a more cost efficient and scalable manner,” he said.

“This roaming agreement is transformative for Cell C. The company is no longer encumbered by the high costs of building a network footprint and we can focus our energy and efforts into developing innovative and disruptive service offerings that will be welcomed by data-hungry consumers.

“This is a win-win all round as it has long-term benefits for the economy, the industry and ultimately consumers,” he said.

MTN said this agreement is in line with its strategy to further develop the group’s wholesale business.

Competitive industry

It will allow MTN and Cell C to harness greater efficiencies in providing telecommunications services, while supporting a more sustainable and competitive industry.

The announcement comes just days after speculation about Telkom’s possible acquisition of Cell C was confirmed on Friday when the former said it has made an offer to acquire the Woodmead-based mobile operator in an effort to take on Vodacom and MTN. Telkom has substantially concluded its due diligence, but discussions are still at a preliminary stage, the company said.

Using MTN’s network will reduce Cell C’s capital expenditure costs on building its own network, a boon for the debt-laden operator still pursuing a recapitalisation that will improve its overall liquidity. The operator had R8.9bn in debt at the end of the most recent financial year.

MTN SA continues to account for Cell C roaming revenue on a cash basis, and payments received since June 2019 have remained on schedule, said MTN.

Cell C said the expanded roaming agreement will be implemented in early 2020, with the transition expected to take up to three years to complete.

The two operators will maintain their spectrum, and each party will use its own frequencies.

Cell C will retain all its licences, and control its core network, transmission, billing system and subscriber management.  

gavazam@businesslive.co.za