Cell C shifts focus to affordability as cash-strapped consumers reshape telecom market

Cell C says worsening consumer finances and changing customer expectations are reshaping the telecommunications industry, with affordability and digital engagement becoming increasingly important drivers of competition.

In its latest integrated annual report, the mobile operator said persistently weak economic growth, high unemployment and cost-of-living pressures were making consumers more price sensitive and placing growing pressure on telecommunications providers to deliver affordable services while protecting margins.

“These conditions have intensified price sensitivity among customers, driving demand for affordable connectivity solutions and value-based propositions,” the company said.

Cell C has spent several years restructuring its operations and implementing an asset-light strategy centred on roaming partnerships and wholesale growth. The annual report suggests the next battleground in the sector will be more about how operators respond to increasingly demanding and financially constrained consumers.

According to the company, customers now expect telecommunications providers to offer the same seamless digital experiences they receive from banks, retailers and other tech-driven businesses. Digital self-service channels, personalised offers, AI-enabled engagement, real-time support and omnichannel experiences are becoming central elements of customer acquisition and retention strategies.

Cell C said changing customer expectations were encouraging operators to simplify products, reduce friction and use data-driven insights to develop more relevant offerings that balance affordability and value. “[We] respond to changing economic conditions and evolving customer expectations by placing affordability, simplicity and digital engagement at the centre of its customer strategy,” the report said.

Management said the company would focus on personalised products and offers, seamless customer experiences and the use of customer insights to develop new propositions.

The mobile operator, which completed its listing in November last year, has reiterated its ambitious growth strategy that centres on prepaid expansion, wholesale services, enterprise offerings and a rapidly growing mobile virtual network operator (MVNO) business.

“Our strategy, executed between 2023 and 2026, created the stability to reset the business. As we move into our next strategic horizon to 2030, our strategy seeks to embed our position as South Africa’s most agile, customer-led, capital-efficient connectivity platform. Here, our growth is underpinned by a diversified platform spanning four lines of business: prepaid, postpaid, wholesale and other revenue (including enterprise),” it said.

Cell C has positioned itself as the ‘home of MVNOs’, providing network infrastructure to retailers, banks and consumer brands that offer mobile services under their own names

At the end of its financial year in May, Cell C had a total of 8.9-million subscribers. Its MVNO numbers were 5.7-million.

Cell C has positioned itself as the “home of MVNOs”, providing network infrastructure to retailers, banks and consumer brands that offer mobile services under their own names. The model allows the company to grow without the customer acquisition costs typically associated with traditional telecoms operators.

“Cell C views the MVNO market’s growth as an important long-term opportunity, enabling the company to reach new customer segments. Cell C’s relationship with MVNO partners has evolved well beyond that of a traditional wholesale provider. Cell C supports its partners with technology platforms, commercial models and product innovation to enable them to grow their businesses,” the report said.

CEO Jorge Mendes said the company is “prioritising the expansion of our enterprise offerings, a segment in which Cell C has historically had a limited presence, but we see significant opportunities”.

On the regulatory front, Cell C said the landscape continues to evolve in response to technological innovation, increasing competition and changing market structures.

Key regulatory developments include proposed amendments to the Electronic Communications Act, reforms to national roaming, future spectrum licensing and renewal, evolving spectrum management approaches, and discussions on regulating the rapidly growing MVNO market.

“These developments could reshape competitive dynamics by promoting greater infrastructure sharing, more efficient spectrum utilisation and broader market participation.”

The company said there was still regulatory uncertainty about such isssues as spectrum renewal and low earth orbit satellite connectivity, transparent, technology-neutral and pro-competitive rules would support innovation and investment.

Business Times