South Africa: Cell C shakes up telecom market with risky promo

Cell C CEO steps down
Cell C CEO steps down
Cell c buyout promo
According to the company, the aim of the promotion is to gain more contract subscribers. (Image source: Leading Architecture)

Cell C, a South African-based mobile operator, has shaken up the telecom market within the country with its latest risky promotion. According to the company, it is now offering to give potential customers up to R10000 (USD 850, dependent on the current exchange rate) in order to buy themselves out of their current contract with rival networks.

According to the company, the aim of the promotion is to gain more contract subscribers. The company revealed that prepaid makes up 60 percent of its overall service revenues. The operator said the biggest barrier to customers switching contracts is cancellation fees for early termination of contracts. It said post-paid and top-up customers from other networks can qualify for between R1000 and R10000, which includes a new handset, if they sign up for Cell C’s new Epic plans.

According to the company,  customers who sign up for the Epic contract packages will not be subject to any price increases for the duration of the contract. Current Cell C customers will also be eligible to migrate to the Epic packages, the company said in a statement.

Since the release of the campaign, the promo has been criticised by rival mobile operators and essentially been called a “Gimmick.” According to a report by News 24, One of Cell C’s largest rivals, Vodacom, has brushed aside Cell C’s attempt to gain more contract subscribers.

The report revealed that Vodacom CEO, Shameel Joosub, dismissed the move in a conference call. Joosub stated that Cell C’s latest promotion is a marketing gimmick, which assumes that customers on other networks want to leave their current mobile operator. The Vodacom CEO said he didn’t expect Cell C’s move to cause a great impact on other networks’ subscriber numbers.

According to Fin 24, Joosub went on to defend Vodacom’s record with keeping its customers happy. In the report, Joosub revealed that Vodacom has experienced higher gross connections and a reduction in churn. Churn measures the level in which subscribers cancel their services. According to Joosub, Vodacom has seen a continuing decrease when it comes to subscribers cancelling their current contracts.

In a statement revealed to, Cell C CEO Jose Dos Santos said that: “This is not a marketing ambush, but a clever strategy to help consumers and get more customers. There is nothing illegal about that. This is a highly competitive market, and we are fighting to get new customers. This is a war.”

To date, MTN is yet to comment on Cell C’s latest marketing move.

Darryl Linington