The deal involves the companies establishing a 50/50 joint venture to create a new player in the SA mobile telephony market. It will be under the Virgin Mobile brand as an independent service provider, but will use Cell C's backbone infrastructure.

There is no doubt that this changes the dynamics of the mobile telephony arena. Says Gartner analyst, Stephanie Pittet: "Services are expected to impact the overall price levels for mobile voice and data, and therefore benefit the end-users. There are no Mobile Virtual Network Operators (MVNOs) yet in SA, but some regulatory clarification is expected by year end."

Virgin Mobile SA is expected to launch before mid-year.

Alan Knott-Craig, CEO of Vodacom, has little to say, and is straightforward about the deal, saying: "It signals more competition, which is always good for the industry."

Despite numerous requests MTN was unable to comment before going to print.