Cell C has fired a new salvo in the ongoing price war with its rivals, introducing a new prepaid package priced at 66c per minute and post-paid packages priced at 79c per minute.
The mobile operator initiated the price war with its 99c per minute pricing in 2012, with competitors scrambling to lower prices in return. In March, MTN took the price lead with the launch of a 79c package, Vodacom followed suit, and Cell C has now responded with a steep reduction in both pre- and post-paid tariffs. "We are turning 99c on its head," quipped Jose Dos Santos, Cell C CEO.
The 66c package will run in parallel with the existing 99c prepaid option, since users will not receive the "SupaCharge" benefits, which grant additional credits for voice, SMS and data whenever a user tops up. In fact, the 99c package with SupaCharge is generally cheaper than the new package, but is subject to expiring benefits; the 66c package is ideal for users who want a low rate without the complexity of micromanaging top-ups and benefits, explained Robert Pasley, Cell C CFO.
It's also good news for Cell C, being easier to manage and delivering a higher margin on average.
The 79c contracts, dubbed ChatMore Standard, ChatMore 200 and ChatMore 400, offer 79c per minute flat rates with bundled minutes and data in the higher tiers. The packages are all structured on month-to-month agreements without lock-in, said Dos Santos.
Growth across the board
Dos Santos took the opportunity to reassure industry observers of Cell C's health, noting the company now serves 16.6 million subscribers, with a record 1.6 million new subscribers added in March.
Revenue grew 14% in 2013, and the operator has continued to roll out new transmission sites and upgrade its core network, Dos Santos said.
It has received cash injections of over R4 billion from its shareholders since 2013, as well as raising R1.8 billion of local debt and $120 million of foreign debt, expected to grow to $320 million by the end of 2014. The foreign debt is due to infrastructure financing arrangements, Pasley said: Cell C has forged close ties with Huawei for infrastructure upgrades and rollout.
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