Cell C hunts for new wholesale business unit boss

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Mobile operator Cell C is scouting for a new head of its integral wholesale business.

The unit is critical to Cell C’s growth strategy as the company seeks to consolidate its gains in the competitive telecoms sector.

The new candidate will replace the late Cell C chief executive for wholesale Björn Flormann, who passed on recently due to COVID-19-related complications.

Cell C says it is now “engaged in a process to fill the executive leadership role” for the vacant position after Flormann’s unexpected death.

The Cell C wholesale business also houses the mobile virtual network operator (MVNO) unit, for which the telco is looking to appoint a new head soon.

Cell C has more than 20 MVNO partners on its network, from the financial services, retail, education, entertainment, telco and non-profit sectors.

In its full-year results ended December 2020, Cell C reported more than two million subscribers through its MVNO partners, and the division contributed 7% of overall service revenue.

Most recently, Shoprite launched its MVNO offering via FREI One Digital, which is a mobile virtual network enabler that partners with Cell C.

The MVNO space has become competitive in SA recently, as telcos seek a share of the lucrative market.

In October last year, MTN announced it had entered the MVNO business, while Vodacom is also reportedly planning to launch its own MVNO platform.

Commenting on the search for the new MVNO head, Cell C says: “The wholesale business is critical to Cell C’s growth strategy and with that in mind, we are engaged in a process to fill the executive leadership role that was previously occupied by Björn Flormann, who passed away unexpectedly earlier this year.”

The strategic positioning of the wholesale business by Cell C comes as the company is implementing a turnaround strategy, to rehabilitate the embattled business.

The new strategy encompasses bringing multiple business units into one fold, as it evolves into a digital services company.

Cell C says it is implementing a more efficient business model, and is transitioning into a more valuable entity.

It has in the past few months been advocating for a quality network over identity, which has seen the company pen roaming agreements with MTN and Vodacom.

In a recent interview with ITWeb, CFO Zafar Mahomed said the network becomes invisible to the customer, as they are only interested in the quality of service they receive.

This, he said, is the maturity of the industry, “being less focused on which network you are using, provided the networks are of equal quality”.

Mahomed noted the infrastructure sharing model is interesting to Cell C, as it frees up substantial capex, helping the company save significantly while enjoying the benefits of high-quality networks.

He said it didn’t make business sense that Cell C was spending only a third of what Vodacom and MTN were investing annually while trying to build a network of high quality.

“Typically, Vodacom and MTN are spending R8 billion to R10 billion a year each, whereas we were spending R2 billion to R3 billion, Telkom R5 billion to R6 billion. So you can understand the massive investment in infrastructure in the country.”

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