New subscribers flock to Cell C

By Candice Jones, ITWeb online telecoms editor

Johannesburg, 25 Aug 2008

Cell C's investment in its core network did not impact its financial results for this year.

SA's third cellular operator reported strong half-year results last week, with revenue up by 17% in the six months ending June 2008.

Shenanda Janse van Rensburg, executive head of corporate communications at Cell C, attributes the R590 million boost to an increased subscriber base over the last year.

The investment in network upgrades has not directly impacted the company's income, she says. Instead, Cell C says the impact is indirect in the form of a depreciation charge. "The increase in depreciation was less than the increase in EBITDA, with the result that operating profit shows a greater increase."

The company has reported steady growth since CEO Jeffery Hedberg implemented a turnaround strategy for the company in 2007. Results have been steadily stronger, both in the year-end report, released in April, and last week's financial half-year.

Janse van Rensburg says the company will continue to streamline operations, with a focus on two essential strategies.

The first is customer care, where the company says it will adopt a more integrated and internal approach to serving consumers. "A number of Cell C's customer-facing operations were integrated into a single unit to create a single point of accountability and a one-stop shop for our subscribers," says Janse van Rensburg.

The company also expanded its network, which included a complete replacement of its core switching technology. "The deployment of this next-generation platform was launched to assist the company to effectively manage the increase in call volumes resulting from the launch of our successful product offering, Woza Weekend," adds Janse van Rensburg.

While the company has shown an increase in the number of subscribers, it could not reveal how much of the local mobile market share it has captured. "We measure revenue share as opposed to customer market share and can therefore not provide information on market share. In terms of revenue share, it is growing, albeit slowly."