Blue Label Telecoms has set the next 24 months as the target to rejuvenate Cell C into a competitive mobile operator, and the company has since activated immediate steps on this journey, backed by fresh capital recently injected into the telco.
Cell C’s largest shareholder, Blue Label Telecoms, which holds a 49.53% stake in the mobile operator, this week updated investors on the telco’s recapitalisation.
On Wednesday, Blue Label Telecoms co-CEO, Brett Levy, told investors during his presentation that there is “a place for Cell C in South Africa” and the “next 24 months should be exciting” as the mobile operator takes a new path.
Last month, the JSE-listed Blue Label closed Cell C’s long cash-raising exercise after it concluded binding agreements with key financial backers.
The new investments have since been injected into Cell C, led by Douglas Craigie Stevenson as CEO, to cater for the company’s financial and operational liabilities.
With recapitalisation now closed, Levy said, Cell C is ready to move forward and redefine its position in the South African telecoms space.
“The recap is officially done; the money has been fully paid over; and everyone is happy, or at least satisfied, with the deal that is now complete,” said Levy.
“It now gives us a chance to move on with our lives as Cell C, and actually implement what we believe this company can be. We have a very clear strategy; we’re not getting into dark fights; we’re not going into any war with any networks; and our pricing is very competitive as it is. Our pricing has always been a little better.
Levy believes there’s a place for Cell C in South Africa: “We understand our place in the market; and we are going to execute on this (strategy). We are looking forward to the next24 months. The next 24 months should be exciting.”
But Levy cautions it’s “not going to be a slam-dunk”.
The forte
In his presentation, Levy gave a glimpse of how Cell C will corner the market, saying the mobile operator has “really good assets” that will give it an edge in the competitive market.
The assets include theCell C brand, spectrum, and its dominance in the prepaid segment and the mobilevirtual network operator market.
Levy noted: “Over the years, Cell C has spent billions of rands on their brand and they have a very strong brand on the market and that, of course, is an asset” adding that with spectrum, “what we are doing with the spectrum is really a big asset for us”.
Levy explained to the investors that the pre-paid market remains core to Cell C, calling it an “engine” but he cautioned that the mobile operator will not be seeking to outshine peers like Telkom, Vodacom and MTN in this space.
Cell C will seek to consolidate its core base with new products, including provision of improved user experience thanks to the roaming deals with other networks including MTN, he said.
The MTN roaming agreement has broadened Cell C’s 4G and 5G network coverage nationally, with Levy saying the majority of the telco’s customers are enjoying the benefits of roaming on MTN’s network.
Six provinces have been 100% migrated, with the Western Cape, KwaZulu-Natal and Gauteng at 88%, 57% and 33%, respectively, according to Cell C.
This relationship with MTN, Levy said, enabled Cell C to hold firm in the prepaid market and there is room for further growth.
In the past 18 months, prepaid products have cushioned Cell C’s performance, contributing the lion’s share of its revenue.
The bulk of Cell C’s revenue continues to come from the prepaid segment, including prepaid broadband, which during the first half of 2022 contributed about 45% to total revenue at R2.96 billion, which was consistent with prior periods.
For 2021, revenue from the prepaid customer base, including prepaid broadband, contributed 47% to total revenue at R6.27 billion.
The overall average revenue per unit for the first half of fiscal year 2022 was 2.6% higher at R80.11, in comparison with R78.07 in the previous corresponding period.
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