Cell C is placing a more distinct focus on the higher-end business segment as it fights for air in a duopolistic market that may soon become even more polarised.
It is the last of SA's operators to make its mark outside of the mobile consumer realm.
The move, say analysts, is not only a strategic and natural progression - but also vital, if the operator hopes to compete in any meaningful way, and remain relevant.
As part of its renewed business focus - the groundwork of which was laid under Alan-Knott Craig's headship in 2013 - Cell C is finalising plans to roll out long-term evolution (LTE) on a commercial basis with its primary suppliers in Barcelona this week.
Cell C CEO Jose Dos Santos says the company has re-evaluated its potential market propositions and taken a strategic shift. "We are taking a more focused approach. We have very specific segments that we are focusing on this year, including the enterprise market."
Cell C will be last to the table with the high-speed wireless technology, with Vodacom having been first to unveil a commercial LTE network in October 2012. The other operators have, in the meantime, also edged into LTE-Advanced, but progress is still hamstrung due to the absence of spectrum allocation.
Last week, Cell C announced it had a total of 4 524 sites on air as at the end of 2014, and had budgeted R2.2 billion for further investment this year. The capital budget, says the company, will support its LTE strategy, which has up until now been limited to trials in Sandton and selected areas in Pretoria, Durban and Cape Town.
Work cut out
IDC telecoms analyst George Kalebaila notes Cell C has grown aggressively, but only in the consumer segment up until now - and largely garnering prepaid customers, which are generally lower average revenue per user (ARPU) consumers.
Cell C says its business arm has "grown nicely" over the last two years. But industry observers say the operator's business segment operations are weak in comparison to its rivals' Vodacom and MTN, and it has its work cut out for it if it wants to compete meaningfully.
"The fact that Cell C is working on adding to its business portfolio is a natural progression - but a little late as its competitors have become very strong in the area, plus we are starting to see this area becoming increasingly crowded with the entry and efforts of other IT firms," says Kalebaila.
He stresses the importance of the business segment, saying it is the next wave. "SA has become a mobile market, with a huge amount of activity driven by consumers of data. But penetration is saturated, at about 154%, and so the next big wave will be business, which is where all the big guys are focusing - in particular in the SME segment. That is where new pockets of growth will come from."
BMI-TechKnowledge director Brian Neilson says Cell C's success will depend on which segments of the business market it will go after and how it will differentiate itself. If the company continues to invest and better its network, he says, it will be better positioned than it has been, to go after the business market.
"Vodacom and MTN did not achieve their position in the market without substantial investment - there is just no other way."
Africa Analysis analyst Dobek Pater points out Cell C has a long road ahead of it before it starts to see glimpses of success in the business market, which is largely contract-based and therefore bound to one- or two-year agreements.
The research firm did some studies when Cell C launched its business arm, and found at the time that this side of its base was minor. With the company's renewed focus, he says, success still depends on a number of factors.
For one, depending on which business segments Cell C plans on focusing on (SME, small owner home owner or big business), its network coverage may not suffice for the mobile workforce. "There is relatively good coverage in Gauteng, but for bigger companies, quality of service, customer support and signal across SA becomes more important. On those grounds they still lag behind Vodacom and MTN."
LTE is a vital part of getting the business segment on board, says Kalebaila. Ultimately, he concludes, the devil will be in the detail for Cell C.
Cell C says it hopes to reveal its LTE plans "in the next few weeks".
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