Nashua Mobile is set to close down, subscribers will however not be let alone as the company is planning to sell all it subscribers to Vodacom and MTN. It is also looking for a buyer for its Cell C users.
Nashua Mobile has not renewed its agreements on the terms on which it was appointed as a service provider to MTN and Vodacom, which recently expired, holding company Reunert stated.
The applicable segments of the Nashua Mobile customer base will be migrated to the relevant acquiring parties who will maintain the current contractual arrangements with customers on the current terms.
The company is waiting for approval of the Competition Authorities and the successful migration of the Nashua Mobile customer base to each acquiring party, even if it will take months to complete. The company promises that there will not be any interruption during this period.
The Reunert statement adds that, for the past several years, Nashua Mobile has been trading in a saturated, highly competitive market. It has experienced declining Average Revenue Per User (ARPU) due to lower network tariffs and lower out of bundle spend by customers.
The decline in the least cost routing (LCR) business and competitive pricing in the market have further reduced revenue. Customer financing has increased as more subscribers move to expensive smart phones requiring higher level customer funding.
These factors have contributed towards declining revenue, returns and cash flow. This resulted in a requirement for Nashua Mobile to assess the sustainability of its business model when it’s Service Provider and Incentive agreements came up for renewal.
Mark Taylor, Reunert executive director and Nashua Mobile CEO, comments, “This was a strategic decision on our part. Our priority now is to ensure that we maintain our service levels to our customers and that they are migrated seamlessly. We are also working hard to ensure that we minimize the impact of this transaction on our employees and make them a key focus of ours over the next while.”
