Dos Santos has tough choices as Cell C boss

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Independent Newspapers

Jose Dos Santos steps into the hot seat. Photo: Simphiwe Mbokazi

Johannesburg - The appointment of José Dos Santos to succeed Alan Knott-Craig as the new chief executive of Cell C, the country’s third-largest cellular network operator, has fuelled more speculation about the strategic path its owners are likely to follow.

Like any other junior firm Cell C, which has come to establish itself as a challenger to early movers Vodacom and MTN, faces multiple challenges which now fall on Dos Santos’s shoulders after Knott-Craig’s brief stint in the driving seat came to a halt last week.

These obstacles include the major task of overseeing the improvement of the quality of Cell C’s network, the retention of customers and the profitability of the products and services offered by the firm.

Although Dos Santos, whose experience in the industry spans more than 20 years, is steering Cell C through price competition and has led the company through legal action instituted by the larger competitors who tried to delay the implementation of new call termination rates earlier this year, analysts believe that he could be preparing Cell C for a possible sale.

Dos Santos, the former chief commercial officer, became acting chief executive in November last year while Knott-Craig, who will still contribute from his new executive director role, recovered from a stroke.

“José is an operational person who will ensure the smooth running of the business, while Alan’s new role may well allow him to push innovative ideas into the organisation,” Arthur Goldstuck, the managing director of consulting firm World Wide Worx, said on Friday.

“There is also a view in the industry that José is there to keep the ship steady while Oger [Telecom, the operator’s main shareholder] explores its options for selling the unlisted Cell C. Either way he brings a methodical and practical approach to the job.”

Competition authorities may prohibit a merger between Cell C and any of its local competitors. Last year the industry speculated that newcomer Orange Horizons, a business of France’s Orange Telecom, might consider buying the company. Pyramid Research, in a report, forecast the entry of the company as a virtual network operator or as an acquirer of Cell C, Telkom Mobile or Neotel.

Cell C said Dos Santos would respond to media enquiries about strategy when he delivered an update on Cell C’s performance tomorrow.

Either way, in the interim Dos Santos’s key priority will be to respond to a price war to remain competitive and stabilise Cell C’s market share, which may come under attack after MTN and Vodacom both recently announced flat rate prepaid packages across any network that were priced lower than Cell C’s similar offering.

Lakshmi Narayanan, the programme manager for information and communication technologies at Frost & Sullivan, said Cell C had helped precipitate the recent fall in cellular prices but lacking the depth of resources of MTN and Vodacom, “one wonders how long it can continue to pursue such an aggressive strategy”.

Knott-Craig, a founder of Vodacom, said last year after he was made Cell C chief in 2012 that he aimed to achieve 25 percent market share in wireless telecoms over three years. - Business Report


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