Post AKC, too popular Cell C throttling back on customer growth

I had the most extraordinary discussion with Robert Pasley, the financial director of Cell C after our CNBC Africa Power Lunch interview last week. Having moved service providers a couple years back in my small show of support for its new CEO Allan Knott-Craig, I’ve lately lived to regret it. My phone rarely rings – people calling get cut off after a single ring, not even re-directed to voice mail. The only way I know they’ve tried is through a “missed call” message appearing – or their irate blasts when they eventually reaching me in a different way. The data service works fine, but useful as this is, the primary purpose of my mobile phone is to receive calls. When I explained my irritation to Pasley he suggested that if I lived in Pretoria things would be better, freely admitting that coverage in Sandton is poor as it’s not a Cell C priority area. Reading Bonnie Tubbs’s piece on ITWeb that we have republished below explains things better. Under Knott-Craig, Cell C grabbed more new customers than it had planned. Its network is overburdened. And with the executive driver having been sidelined by health issues, his successors are consciously trying to throttle back on customers. Ask me. – AH 

By Bonnie Tubbs, telecoms editor of ITWeb

Alan_Knott-Craig_LeadCell C has been heavily focused on growing its market share since Alan Knott-Craig (right) took the helm in 2012, but recent moves suggest the self-proclaimed “consumer champion” may be doing so at the expense of the very consumers it has vowed to fight for.

This is according to industry observers and comes after SA’s third operator announced subscriber growth far beyond Knott-Craig’s initial aim of adding five million subscribers by the time his three-year term would have come to an end in April 2015.

Knott-Craig has been out of the driver seat since mid-November, when he suffered a minor stroke. In May, Jose Dos Santos – Cell C’s former marketing head – took over, as Knott-Craig took a back seat, as a board member.

Recently, two changes in data billing by Cell C – both of which mean higher bills for Cell C data users – were instituted. In April, Cell C announced its previously homogenous data rate structure would no longer exist, and that out-of-bundle (OOB) data would in future cost 99c per MB (as opposed to 15c).

Shortly afterwards, it emerged the operator had increased the billing increments on its data products to 25KB, which Cell C said at the time was in line with international standards. This can be compared per-minute versus per-second billing on voicecalls and means users may end up with higher bills (in bundle) or reach OOB rates quicker, as data transfers used are rounded off to, in cases, higher amounts than they previously were.

Cell C says it standardised the billing increments of all of its data products as billing increments used to vary between products. “Some increments were above 25KB and others were lower. It is now standard and equates to 2.4c per 25kbps for out-of-bundle usage.”

Consumer cause

World Wide Worx MD Arthur Goldstuck says it seems Cell C has fallen behind dramatically in terms of its data price policy. “In fact, they have regressed. Everyone wonders why they introduced the [hiked] OOB rates. It would appear they are trying to discourage data customers because their network can’t cope. The level of complaints around [Cell C’s] network is drastically high.”

Cell C has responded, saying no company would want to discourage customers from joining their services and that, despite recent changes to its data pricing, it “still has some of the lowest data rates available on the market”.

The new OOB rate of 99c per MB, says Cell C, is still competitive when compared to other industry players. “Cell C adjusted this rate to ensure that it could provide customers with a discounted rate when they purchase the higher-end bundles. (Customers now benefit from an in-bundle rate of between 2c per MB and 15c per MB.)”

ICT veteran Adrian Schofield feels Cell C’s data pricing changes and the recent introduction of a 50c per minute prepaid promotion – exclusive of Supacharge benefits – came into being primarily with winning market share in mind. “The number of customers would appear to be more important than the satisfaction level.”

Network capacity

Regarding Cell C’s network and the capacity it has to handle the over 18.1 million subscribers as per the company’s latest update, Cell C spokesperson Karin Fourie says: “Cell C’s core systems have been provisioned accordingly. [Investments] have helped dramatically improve network quality. These are ongoing projects and Cell C continues its investments to keep up with customer demand.”

The said investments, notes Fourie, include R2.3 billion in capital expenditure budgeted in 2014 – and an additional estimated R2.1 billion for 2015. “Three hundred and eighty sites have either been rolled out or planned for this year.

“Additionally, Cell C is in the process of swapping the Radio Access Network equipment of over 1 500 sites from NSN to Huawei in a three-phase process, which should see the first phase concluded by November this year. The idea behind the work with the equipment transfer is to continually bring stability into the network, increase the coverage and capacity, and provide the best quality to our customers.”

She says Cell C has also continued with upgrades and renewal of its transmission network at various levels of the transmission and transport layers, deployed additional fibre routes and has made strides to complete the fibre rings in metro areas.

First published on ITWeb |

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