Tough competition in S.Africa’s mobile space - CNBC Africa

Tough competition in S.Africa’s mobile space

Southern Africa

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“There are two levels in which they have to invest this kind of money; the one level is to improve their existing infrastructure as they will be picking up more new customers than any of the networks. The expansion is going to put greater strain on the existing infrastructure,” Arthur Goldstuck, Managing Director at World Wide Worx told CNBC Africa on Wednesday.

“On another level, to compete effectively with the others they have to invest on the same level as the others as well.”

On Wednesday Cell C announced a cash injection to the tune of 350 million dollars from Oger Telecom and an additional 222 million dollars loan from Nedbank.

Goldstuck said the funding will certainly ensure growth in subscription and also help the network provider not to lag behind its competitors. Vodacom and MTN are already investing billion rands per annum to improve network quality and infrastructure for them to stay on top of the game. 

“It’s certainly a relevant contribution and very relevant investment. Cell C remains well behind the two major networks MTN and Vodacom and each of them are investing seven billion rand a year in infrastructure and that’s been happening for the past two years, it will happen this year and will probably happen in the next couple of year,” he added. 

“So that means that Cell C by committing about 3 billion rand and also adding to that the Nedbank loan around 2.5 billion means that they’re able to maintain the distance that they have with other networks but certainly not able to catch up with them or overtake them.”