Analysts: Virgin, Cell C a good deal for SA

06.02.2006

Director at BMI-T, Brian Neilson, has his own views. He says: "It may help Cell C to at least maintain its effective market share, if not grow it slightly."

What will the implications be for the cellular/telecoms industry as a whole? Neilson comments: "Will prices come down rapidly? In niche areas, yes, for example, in respect of tailor-made packages for higher volume-of-use pre-paid users."

The concept of co-opetition is also a factor that is raised in terms of the deal, as the two companies will be in direct competition, but sharing the infrastructure. Neilson says: "Again, this relates back to defining highly targeted, clearly defined markets. Also the law of averages is in Cell C's favor, in that there are many more Vodacom and MTN subscribers, and chances are that more of these should churn to Virgin than Cell C customers churning to Virgin."