(Bloomberg) -- MTN Group Ltd. will replace some of the services provided by its cross-town rival Vodacom Group Ltd. in a network-sharing deal with Cell C (Pty) Ltd., South Africa’s third-largest mobile-phone operator.
Cell C, which has roamed on Johannesburg-based Vodacom’s network since 2001, will switch to MTN for certain 3G and 4G services from next month, Cell C Chief Executive Officer Jose dos Santos in an email. The bulk of services will be transferred within two months and will allow the operator to offer connectivity in areas where Cell C has decided not to build networks, he said.
For MTN, Africa’s largest mobile-phone operator, the deal will help fund “our ongoing network network expansion,” MTN South Africa CEO Godfrey Motsa said in a statement. Cell C will roam on MTN’s network in smaller cities and rural areas, where the company has additional capacity.
South Africa is MTN’s largest market after Nigeria and the company has invested almost 30 billion rand ($2.4 billion) during the past three years to expand its network and catch up with Vodacom’s coverage in the country.
Vodacom will use the additional network capacity and mitigate losses in roaming revenue by adding customers while the country is struggling with a shortage of spectrum, Vodacom spokesman Byron Kennedy said by email. Additional capacity will also allow Vodacom to provide faster Internet speeds to its customers, he said.
In certain areas, Cell C will continue to use Vodacom’s network to provide 2G and 3G services through an agreement that will remain in place for at least another two years, according to Kennedy.
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