Cell-C’s Knott-Craig launches aggressive action against Vodacom’s customer base

He may be “IT Person of the Year”, but Alan Knott-Craig Sr has not made friends everywhere, developing quite a reputation for jumping ship and now targeting his former employer as he looks to turn Cell-C into a South African powerhouse.

Having served as Senior General Manager at Telkom prior to taking up the position as CEO at Vodacom. Now at the helm of Vodacom’s rival Cell-C and launching aggressive marketing strategies aimed at stealing Vodacom’s core customers, is the once-retired CEO really one to strategise on loyalty?

Having served twelve years as the chief of Vodacom – South Africa’s most successful mobile network operator, currently dominating over 50 per cent of the South African market – Knott-Craig left the company in 2008, citing ill health and exhaustion. Following four years of retirement, the man returned to the business in January, but this time in the position of CEO at rival Cell-C.

In his new post, Knott-Craig goes up against his own Vodacom protégé, Shameel Joosub, who succeeded his mentor when he left the telco.While many would see this as a rather obvious slap-in-the-face to Vodacom and its CEO, Knott-Craig, it would seem, does not share this opinion. In fact, the Cell-C CEO appears to be launching an all-out offensive against his one-time pet project, slashing prepaid calling prices to 99 cents per minute in May and significantly undercutting his larger rivals.

This first move caused much amusement in the South African mobile network arena, as Vodacom immediately responded by announcing its “Freedom 99” pay tariff in what appeared to be a game much akin to tit-for-tat. However, Vodacom failed to realise it had not adhered to regulatory requirements in announcing the new tariff, and had to withdraw the plan pending proper procedure.

Cell-C also announced a cut to international calling costs, which are also now 99 cents per minute, provoking another response from Vodacom, who announced a new 89 cent per minute international calling tariff – although customers will be fined R5 a month for using the new tariff. Naturally, Knott-Craig has brushed off the response, saying Cell-C will undercut the 89 cent rate if it ever actually comes to fruition, referring to the delays in implementation the rate has seen.

Not satisfied with minor provocations, Knott-Craig has now upped the stakes, announcing his master plan publicly in an interview with TechCentral last week: Cell-C is going to go after Vodacom high-end customers, and steal them away. Knott-Craig said: “We absolutely have to attack the Vodacom and MTN base at the top, and I don’t use the word ‘attack’ lightly… We cannot pussyfoot around this thing. We have to get to the high-spending customers.”

Meanwhile, Cell-C has quietly signed a deal with Discovery Vitality, one company that Knott-Craig has claimed is being shut out of the market by Vodacom and MTN dominance. The deal will see the pair launch VitalityMobile – a system by which paid-up members will be able to call each other for free if they belong to the Cell-C network.

Derisive and critical claims of market domineering practices against Vodacom and MTN are somewhat hypocritical, however, given that it was Knott-Craig who pushed Vodacom to the top spot during his twelve year spell at the head of the company. Furthermore, it is the same spot that he is trying to snatch for Cell-C, using aggressive practices while poking fun at his old protégé.

It must be said that Joosub – besides his tendencies to jump off the deep end every time Knott-Craig takes a stab – is actually bearing the affront relatively well. Responding to the hyped-up attack speeches by his former boss via TechCentral, he very measuredly said: “I think Alan’s very smart. He’s been a leader in the industry. He gave me a lot of opportunities. He’s a very clever guy but he’s got his work cut out as well… Vodacom will stay competitive and Vodacom is not going to roll over… It’s great competing with Alan.”

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