Business Insider Edition

A new deal means Cell C clients can use MTN's network - for much cheaper than MTN users

James de Villiers , Business Insider SA
 Nov 18, 2019, 04:16 PM
  • Cell C concluded a network agreement with MTN, allowing its consumers to roam on MTN’s entire network. 
  • Cell C pricing is generally lower than MTN, so this means that its clients will be able to use MTN’s network at a much lower cost. 
  • The deal may be bad news for Telkom's ambitions.
  • For more stories, go to Business Insider SA.

Struggling network provider Cell C has signed a roaming agreement with competitor MTN, allowing its users to use to MTN network. 

Cell C’s previous agreement with MTN in 2018 allowed it to use MTN’s 2G, 3G and 4G network outside main metropolitan areas, but the new deal includes metropolitan areas as well. 

The deal extends Cell C’s coverage to over 95% of the South African population, and will be implemented from early 2020 over 36 months. 

Apart from newcomer rain who only offers data services, Cell C offers the country’s cheapest data prices at R80 for 1.5 gigabytes, compared to MTN which charges a whopping R149 per gigabyte.

300 megabytes at MTN costs R60, compared to R49 at Cell C for 600 megabytes under their Summer24 promotion.

Also read: After 10 years, Vodacom, MTN and Cell C have all started locking handsets to their own networks again

Technology analyst Arthur Goldstuck said this means that Cell C consumers will technically be able to use MTN’s vast network at a cheaper cost through Cell C. 

Goldstuck, with over thirty years of experience in the technology sector, said depending on implementation, Cell C users will soon have access to a much-improved service. 

“I think MTN realised it had lost out when it lost a roaming agreement with Telkom to Vodacom last year, and wanted to avoid Cell C also taking its roaming agreement to Vodacom,” Goldstuck told Business Insider South Africa. 

He said Cell C was simply unable to expand its network at the rate Vodacom and MTN did, and spent most of its cash resources repaying its debt, which means it was falling ever further behind.

Cell C is suffering under a R8.7-billion debt burden, and is in talks with several investors to refinance the company.  Cell C previously fell behind on payments to MTN for using its network - to the tune of R393 million. On Monday, MTN said payments received since June have been on schedule.

Bad news for Telkom

Goldstuck didn’t see any reason potential Cell C users should fear the company closing, as it will likely be bought by Telkom or be refinanced through creditors. 

“Consumers should start doubting Cell C’s services when it experiences ongoing network issues. The MTN deal goes a long way towards addressing current reception issues. "

Telkom on Friday confirmed that it is in talks to buy Cell C to create a company with over 22 million mobile subscribers. This will make it easier to challenge MTN with 30 million subscribers in South Africa, and Vodacom with 43.8 million customers. 

Telkom's share price was down more than 2% by late afternoon, while Blue Label - which owns Cell C - rallied by 6%.

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