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Rumoured CellC and 8ta Merger
CellC and Telkom MNO 8ta are rumoured to be in talks for a merger. This could be a significant play in the SA telco landscape. Telkom has been a slowly dying fixed line business with 8ta not really changing the playing field significantly, Telkom does however have the Lions share of fixed line and backend data infrastructure. CellC for a long time the distant third MNO to MTN and Vodacom has never truly had the critical mass to effectievly compete. CellC has however been makign some aggressive data and voice plays. A merger between the two small players could give some mass and momentum to allow a combined entity to effectively compete with MTN and Vodacom. Although the customer profiles are similar, CellC does bring some more mobile volume to the party and Telkom access to valuable infrastructure. Remembering the early days when CellC had to ride on vodacoms network and reversal would certainly be entertaining. Time will tell if the rumours are true and its too ealry to clearly define potential market impacts, but I for one am excited, it could certainly make the party interesting.
Read more here: http://www.bdlive.co.za/business/technology/2012/10/16/merger-for-8.ta-and-cell-c
Google and 8ta partner to provide free internet, clients win
Google FreeZone in partnership with 8ta will be offering free access to Gmail, Google+, Google search and first page post search.
This offers the opportunity for a whole new segment of the population to access the internet, as there is certainly a band of the population who have accessability ambitions but are restrained by limited disposable income for such endevours. Google has the opportunity to grow is advertising audience, 8ta has the opportunity differentiate and improve it offering to the low mid to higher mid LSM ranges, while hopefully upselling them on other charged services. Advertising data funding models have shown limited success in other regions in the world even where base data costs where lower. It is also important to note that the target audience in this case are lower income earners which reduces their appeal and hence revenue potential to an advertiser.
The details of the 8ta/Google deal are not clear as to how the costs have been split. Telkom despite its dominance in local infrastructure would still incur expenses on the international line links especially if linking to US based Google services such as Youtube. If data policies ae strict to avoid or limit large downloads and video content the model could well work, but depends of actual data costs. Of course as neither company is likely to share details the actual financial impact will remain unclear, i would imagine though that the upsell on additional services would be be key for 8ta.
Financials aside this is a great initiative, and hats off to both businesses for helping bridge the connected divide.
8ta | Jomo Sono wedding
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