After completing the initial phase to turn its embattled mobile operations around during 2019 and 2020, telecommunications group Cell C is now entering its next phase of “transitioning and evolving” before pivoting from a telco to a ‘techno’ by 2024.

Cell C’s focus in the future will be on leveraging its telco heritage to evolve into a customer-centric digital lifestyle company that offers value-for-money solutions and services by understanding the needs of its customers, says Cell C CEO Douglas Craigie Stevenson.

Over the past two years, Cell C’s initial turnaround strategy, which stabilised the company and delivered a more fit-for-purpose cost structure, focused on its network, including a product review and the optimisation of traffic on the network.

Focus was also placed on operational rationalisation, including a cost efficiency programme; the restructuring of Cell C’s operating model; a recapitalisation programme, which is a work in progress that is expected to be completed in 2021; and its liquidity platform.

This led to improved financial performance and operational efficiencies, setting the foundation for a new business model and moving away from playing “catch-up” with its entrenched bigger rivals.

Cell C has been in a position of playing catch-up for many years, says Craigie Stevenson, noting that it could take 18 years for Cell C to catch up with big infrastructure players, based on 400 new sites built a year and assuming no new sites are added by the infrastructure players.

“The estimated capital expenditure (capex) catch-up on that basis will be up to R12.4-billion a year, which is impossible for Cell C to maintain,” he says.

However, the operator’s new business model is addressing its needs to be able to play in the same space, with access to infrastructure and quality networks, while benefiting from scale.

The transition-and-evolve phase, from 2021 to 2023, will focus on a three-year transition to a virtual radio access network provisioned by MTN as part of its network strategy; a reduction in network expenses, finance leases and capex; the introduction of new products; the implementation of the new business model; cleaning its customer base; and the finalisation of the recapitalisation programme to strengthen its balance sheet.

The final phase, ‘growth as a techno’, in 2024, will result in Cell C becoming a digital services provider, strengthening and leveraging its position as a significant wholesale buyer and aggregator of network capacity.