Cell C will come out swinging

The market is grossly underestimated and there is still room for Cell C to compete aggressively in mobile voice, says SA's third mobile operator.

Freshly-appointed CEO Lars Reichelt says there is more than enough room to grow the local business, despite the high penetration of SIMs in circulation.

The company has battled to steal market share from larger rivals MTN and Vodacom since its inception; however, Reichelt says it plans to make some aggressive moves that will shake up the market.

He says Cell C is in a good position to take a heavier stance in the market. “It is an exciting industry and it's what I love to do. I like to come in as the underdog and surprise everyone.”

The company recently revealed two niche products aimed at capturing specific markets: Winc, its product dedicated to women; and a gospel-based product to target the large local religious community.

The tactic of targeting niche markets has been successful in many international markets; however, many of these products internationally are run by virtual mobile operators. Reichelt says he introduced the concept here, because none of the other operators have tried it yet.

Cell C yesterday announced its R5 billion network investment to bolster its broadband offering. Reichelt says that, added to this, it is also installing its own fibre networks to boost its backhaul capacity.

Reichelt says the one concern he still has about the local market is the trying regulatory environment. He says the regulator has done nothing to foster competition in the market, leaving the landscape benign. “What worries me about the market is that we have a regulator that doesn't know what it wants to be. It wants to regulate, but it doesn't know what to regulate.”

He says the Independent Communications Authority of SA is trying to regulate the wrong aspects of the market, by regulating individual issues. This is an area that he believes needs major change because it has become an impediment to competition. “They should be looking at creating a level playing field instead.”

The regulator has faced the grinder this year, both from consumer reaction and a recent government whipping over the high cost of interconnect rates.

However, Reichelt does give the regulator some credit, saying the business of regulation is exceptionally tricky. “Look at [US economist Alan] Greenspan; two years ago people called him a hero, now he is looked at as a villain,” he notes.