Cell C says it will have its network up and running before the end of this year, in time to benefit from the seasonal surge in customers seen over the Christmas period.
"We can now begin the process of building our infrastructure after concluding service and spectrum licence negotiations," said Cell C director and spokesman Zwelakhe Mankazana in a statement on Friday. "We can begin reaching interconnect, roaming and other agreements. Speedy resolution of these matters will allow Cell C to make up for lost time and begin the process of building a world-class network."
The consortium believes there is still potential for its business, despite the long hold-up in the award, which has seen the current operators entrench their positions. It is almost a year since the SA Telecommunications Regulatory Authority (SATRA), predecessor to the current regulator, selected Cell C as its preferred bidder for the third licence.
[AUDIO]"While the undue delays in the award of the licence have been expensive to us, we are confident that the cellular market still holds promise," said company CEO Talaat Laham.
The consortium expects to have incurred costs of close to $20 million (over R150 million) by the time its network is active, not counting the opportunity lost by the licensing delay. Paul Doany, an advisor to the consortium, estimates that cellular customers in the local market can be valued at between $1 500 and $2 000 each, and that at least a fourth of all users signed up by MTN and Vodacom over the past year could have gone to Cell C.
Doany said Cell C will look at gaining customers from the estimated 20% of prepaid market churn between the current operators, although this will not be its primary aim.
"We are more interested in expanding the market in terms of users and traffic on the network," he said. Data traffic and services are also expected to eventually account for a large part of the company`s revenue.
Laham said Cell C would offer a competitive and cost-effective network alternative to MTN and Vodacom. "We will have a range of innovative, competitive and affordable products and service offerings that we look forward to bringing to market."
Doany said earlier forecasts that the company would attract 200 000 users in its first 12 months of operations were probably low, and that this figure would likely be exceeded. The consortium believes SA will have between 14 million and 16 million cellular users by 2005.
With immediate access to the 1800MHz frequency spectrum that has to date been denied to MTN and Vodacom, Cell C is expected to make a strong play for the wireless data market. The 1800MHz frequency is far better suited to the transmission of data than the 900MHz GSM currently in use.
However, the company says it needs to update its business plan and negotiate with the regulator on spectrum issues before specifics on the products it will offer are made public.
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