Guiding Cell C to a Stronger Strategic Position

Cell C has made tremendous progress over the past 18 months and Capgemini have been true partners in helping us on this journey. Jeffrey Hedberg, Chief Executive Officer, Cell C

The Situation

With over 4.8 million mobile subscribers, Cell C is South Africa’s third-largest cellular service provider.

Launched in 2001, Cell C witnessed rapid success during the initial years, but gradually began to struggle with changing market dynamics and stiff competitive pressures leading to:

• slowing subscriber growth
• high customer churn
• escalating costs  with little scale advantages
• lack of clear focus.

The result, an inadequate growth trajectory, was against a backdrop of substantially bigger competitors with deep pockets. Cell C needed a fast turnaround to pull its business back to stability, and then move towards profitability and growth in line with shareholder expectations.

The Solution

Cell C looked to Capgemini’s Telecom Media and Entertainment practice to help them diagnose the problem and formulate a solution.

Led by Capgemini, a joint team of consultants and Cell C team members worked diligently to assess the market prospects and strategic options for Cell C. Working closely with the Cell C Management Team/Executive Committee, the team devised an inspiring vision and a 5-year corporate strategy to put the company back on the path to profitability and growth. The key elements of the strategy were to:

• focus on operational efficiency for increased service levels and margins
• exploit increased efficiency to offer best value for money services
• aggressively increase market penetration via new pricing
• complement own customer base with targeted Mobile Virtual Network Operators (MVNOs) to penetrate hard-to-reach segments.

The Result

The implementation of the strategy has resulted in significant EBITDA and cash flow improvement without workforce reduction. Positive signs are evident throughout the business, signaling success:

• strategy execution is being driven by the CEO supported by a fully committed executive team
• company-wide clarity on the strategic direction enabling focus
• step-change  improvement in customer experience
• improved IT and network operations ensuring service quality. 

Beyond their solid Telco insights, the Capgemini’s collaborative approach has ensured that ideas have been transferred from paper to actions, and ultimately, to results. Harri Rauhala, Chief Strategy Officer, Cell C