Cell C Striving Towards Leadership

"We want to be the data leader in South Africa," said Lars Reichelt, former CEO of Cell C. "We believe that is the way to go. We have the firepower, the technology, and by the end of next year, we will cover 97% of the country's population with our network."

Cell C is South Africa's third largest cellular mobile operator after Vodacom and MTN. But the company doesn't want to remain on the tail of the two big shots. It is looking to wear the crown in the South African telecom market.

However, becoming the leader is a long, hard road for Cell C, and the company must overcome two unavoidable obstacles: Vodacom and MTN. Vodacom is the top operator in South Africa, a subsidiary of the most powerful operator, Vodafone.  MTN also has a firm hold on the South African telecom market and it is difficult to shake the alliance between these two giants.

Reichelt's vision, however, proved to be more than just words. In less than two years he rebranded Cell C, rolled out new network infrastructure, introduced new pricing, and opened new retail stores.

"Combating Cell C in the past was child's play for MTN and Vodacom," said Simon Dingle, a telecom marketing analyst. "As the schoolyard bullies, they could easily shove aside the awkward kid trying to get a share of the sandpit that's South Africa's cellular market. But Cell C has grown up and discovered steroids. It has older siblings that have taught it how to fight, and it has a vendetta against the two incumbent networks that have made its life hell for a decade. But it will have to beat down some other kids along the way."

It boils down to a question of who is the older sibling and who will provide the firepower and the technology for Cell C. The answer is not hard to uncover. ZTE, a Chinese telecom vendor, seems to be the older sibling teaching Cell C how to fight. ZTE is providing firepower for Cell C.

In January 2010, Cell C signed a network construction contract with ZTE for approximately 2400 2G/3G sites. This is a turnkey contract, meaning ZTE will deliver a well-constructed high-performance network in the same way a house broker delivers the front door key to a new owner. In such a turnkey project, ZTE will respond to everything, including site construction and acquisition.

Why would a South African company choose a Chinese company to teach it how to fight and ascend to the top?

ZTE was the first promoter of SDR technology in the telecommunications industry, and in recent years, it has achieved global success with its Uni-RAN solution based on SDR. Its SDR series base stations can be smoothly evolved from GSM to UMTS and even to LTE. Only software upgrades and minimal hardware changes are necessary, and this is very appealing to operators all over the world. It is especially appealing to operators like Cell C who face the challenges of shrinking capital investment and slow-growing revenue. Since ZTE sold its first SDR base stations in 2008, more than 500,000 units have been deployed worldwide and serve more than 120 operators. These numbers prove that ZTE is the partner of choice.

ZTE's very substantial global experience and advanced SDR technology are the reasons why the Chinese vendor was chosen to teach Cell C how to fight.

Also, by brokering a deal with the China Development Bank, ZTE has secured funding of more than 2 billion rand and has helped Cell C reduce its considerable debt. Two billion rand is so powerful that Cell C now has enough firepower to clear its path to the top of the South African telecom market.

In 2010, the Cell C network was baptized by the World Cup. A huge number of subscribers joined the Cell C network. Almost everyone in the stadium wanted to send messages to their friends and share the electric atmosphere of live football. The Cell C network had to deal with a huge influx of traffic. Supported by ZTE engineers, the Cell C network performed well and more than passed the test.