SA's third mobile operator, Cell C, has signed a pan-African roaming deal with international telecoms powerhouse Zain.
Cell C CEO Lars Reichelt says the deal will allow Cell C subscribers to roam in countries with a Zain network, at significantly reduced rates, and Zain customers can do the same in SA. Subscribers from both companies will also be able to recharge where they have network presence.
The deal will surprise many in the industry, who would have expected Zain to have made this agreement with MTN. Reichelt says the deal even stunned Cell C's shareholders. “The shareholders were surprised and happy with the deal,” he adds.
BMI-TechKnowledge MD Denis Smit says it is interesting that Zain didn't choose MTN; however, he feels the deal will not pan out to be particularly significant. “There are not likely to be many minutes passing through Cell C's network in this deal.”
However, Smit says the agreement does represent a good marketing opportunity for Cell C, which has long battled to improve its subscriber numbers and has been hampered by the incumbents' deep pockets.
The contract will allow Cell C small leverage to offer reduced rates on Zain's African network and, if the Zain Bharti deal goes through, on Bharti's network. Bharti and Zain are in the final phases of discussions for the Indian business to buy up Zain's African operations.
The Zain deal with Cell C is likely to rekindle speculation that Bharti may be shooting for a chance to buy Cell C. Last month, analysts slammed reports that there could be a tie-up between the two businesses, saying the smallest operator will always be subject to speculation.
However, Reichelt says that as far as he knows, the shareholders are not in discussions to sell Cell C. “While there is money to be made, it doesn't make sense for the shareholders to sell,” he adds.
Cell C has made a smaller deal with Econet Wireless, which will allow customers in SA to call home, in Zimbabwe, at cheaper rates.
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