Rivals MTN and PrimeTel fail to capitalise on 4G - Contract wins vs pre-paid
State-owned Cyta, the telco that should have headed for privatisation within the next three years, has been steadily losing market share to its rival mobile phone operators, who, nevertheless, failed to capitalise on the launch of high-speed 4G telephony earlier this year.
The total number of mobile phone subscribers continued to decline in the first half of 2015, to its lowest level since the second half of 2011, down 14,385 to 1,096,417 from June last year. The fall is mainly attributed to the economic crisis with subscribers cancelling more pre-paid lines than monthly contracts.
Interestingly, the pre-paid market is at its lowest level of the past six years, while contract subscriber levels are at their highest of the past six years. The turning point was the end of December 2013, when both services were tied, with pre-paid mobile telephony being the dominant before that.
With Cyta’s market share at 63.85%, the once former state monopoly had a total of 700,062 subscribers at the end of June, losing 32,778 subscribers in a year. This suggests that its gamble to delay its nationwide transmission of the 4G platform to the end of the year may pay off as the threshold 700,000 subscriber mark must be maintained if it wants to retain value and be attractive to new investors.
Already, since October, Cyta had been selectively upgrading subscribers and geographical areas to test its national reception, with the telco announcing that it was nationwide reception as of November.
In an effort to boost revenues, Cyta has been prioritising corporate customers at the expense of ordinary users, but
offering this will never bring down the huge payroll, as analysts suggest that the state-owned telco’s 2,000 staff makes it “hugely oversubscribed” with lower output than its rivals.
MTN, whose CEO had publicly challenged Cyta some two years back, claiming the South African network would reach a 50% market share, too, has missed its mark.
In April, it launched a major campaign employing Formula racing driver Tio Ellinas, saying in its adverts at the