Chasing the network, Cell C aims to deliver quality over quantity

Like many South Africans I enjoyed watching Chasing the Sun, the documentary that relives how the Springboks won the 2019 Rugby World Cup in Japan. One could see the importance of leadership and how individual players made unique contributions to the team’s eventual success.

This Cinderella story started from a difficult place. If you recall, the Springboks were not favoured to win the tournament. Doubters abounded. Winning the Webb Ellis Cup was a remarkable journey — a turnaround strategy that came to fruition. Every player had to prove why they deserved to be world champions.

There are three important takeaways from the series, all of which are relevant to SA’s mobile sector. These lessons are also useful in describing how Cell C is reinventing itself and how it wishes to compete, even though it may be perceived as an underdog.

Lesson 1: Play your plan (but adapt). After a humiliating defeat in September 2017 at the hands of arch rivals the All Blacks, the Springboks had to rebuild. Over two years, players and coaching staff mounted a historic comeback to restore their dignity and the reputation of SA rugby.

In a similar way, Cell C has had to turn its business around — against stiff headwinds. The company has worked hard to position itself for long-term success. Now that its turnaround strategy is in play, the company is more competitive and adapting to the evolving telecoms landscape.

Covid-19 has accelerated the adoption of Cell C’s new business model and initiated profound adaptation, particularly in its network strategy and market approach. It has sometimes been a bruising experience, but we are coming through as a stronger and healthier business.

A successful recapitalisation will put us in a better position to compete. We have the right team in place and are eager to contribute more to SA’s digital ecosystem. In “rugby speak”, we have chosen our style of play and our game plan.

Lesson 2: Be creative and nimble. Cheslin Kolbe is not the biggest Springbok player, but he is agile and creative. He “punches above his weight” and takes the gap when appropriate. He won’t be bullied by the “big boys”. 

The same can be said for Cell C. There are players in the mobile market who believe size matters most. Some competitors boast about having the biggest network. Others view their number of subscribers as a point of pride. We have a different set of metrics for success.

Relying upon size and brute force doesn’t always work (just ask Kolbe). It takes skill, cohesive teamwork and picking the right places to compete. Smashing head-on into a much larger player is rarely the best decision.

For example, when Cell C talks about becoming a wholesale aggregator, this is one of the ways it plans to participate in the telecoms sector along with its bigger rivals. Similarly, when it comes to customers, services and products, the company’s focus is on quality over quantity. 

At the end of 2020, we saw our total subscriber base back up to over 12.5-million (the first half of 2020 was at 11.7-million) and the average revenue per user for our prepaid customers increase to R72 (in the first half, it was R66). 

Lesson 3: Competitive collaboration works. The Springbok World Cup squad included 31 players. Leading up to each encounter, teammates competed with one another to hone their skills and create efficiencies. So it is with the mobile sector. We must work together and compete effectively to win.

Just as rugby has evolved over the past 10 years to become more sophisticated and nuanced, so too has the telecoms industry. Hundreds of billions of rand have been invested in physical networks, and new services are emerging. This has led to a new chapter in the evolution of telecoms: the age of network sharing.

In January, Cell C began implementing its network strategy, which will see the transition of customers to partner networks, as we look to significantly reduce capital expenditure, shut down our physical network and rather buy infrastructure services from the bigger players that have the funds to continue to invest in new technologies. 

Cell C’s contract and broadband customers will by the end of February be roaming on the Vodacom network, while prepaid customers will, after a 36-month transition, roam on MTN. By aggregating wholesale capacity we aim to differentiate ourselves on our service and products. Collaboration and competition are mutually beneficial. Around the world such active sharing agreements are proving to be a successful model for the mobile sector.

Looking forward, Cell C wants to contribute to the government’s plan to improve broadband access, transform the information and communications technology (ICT) sector, promote service-based competition and stimulate inclusive economic growth. Finance minister Tito Mboweni has said funds generated from the spectrum auction will establish a fund that will be “… an important long-term tool for saving and investment for future generations”.

We too want to grow the game and play better while we do it. If the spectrum auction due to take place in March is to increase competition — rather than entrench market dominance — there should be mechanisms in place to ensure universal access and service standards. While the auction presents an opportunity for the government to bring in much-needed funds, the long-term viability of the sector is also at stake.  

As a mobile operator, we want to empower and connect South Africans to products and services they value. Each player in the ICT market has different strengths and abilities, and Cell C believes what it brings to the table is supportive of the government’s plan for a more robust telecoms sector, a stronger economy, and a transformed SA.

• Craigie Stevenson is CEO of Cell C.