Blue Label Telecoms has denied its contract with Vodacom to distribute airtime is being cancelled, rubbishing widespread market speculation that the mobile operator has served notice to terminate the agreement.
Co-CEO Brett Levy said on Tuesday at a press conference to discuss Blue Label’s results for the six months ended 30 November 2016 that the contract with Vodacom is not being cancelled and, in fact, still has four-and-a-half years to run.
Levy’s brother and co-CEO Mark Levy said it’s “business as usual” with all mobile partners, including Vodacom. Blue Label, he said, is positioned as a “neutral distributor of products and services and people shouldn’t lose sight of that even though we have an agreement in place” with Cell C.
Blue Label is pushing ahead with a plan to acquire 45% of mobile operator Cell C for R5,5bn as part of a recapitalisation of the debt-laden mobile operator. Under that deal, Cell C’s debt will be reduced from more than R20bn to less than R6bn.
But the deal has raised questions about the long-term relationships that Blue Label has with rival operators, including Vodacom and MTN, which might not want to distribute their products through a company that owns a significant stake in a direct competitor.
“We will remain loyal to our partners,” Brett Levy said. “We will continue being a neutral aggregator because … that’s what we do.”
Blue Label on Tuesday said interim headline earnings per share had risen by 54%, in part thanks to the impact of a fair-value gain resulting from subsidiary Oxigen Services India being viewed as a venture capital investment. Revenue growth was 3%, reaching R13,2bn. The South African distribution business continued to perform strongly. — © 2017 NewsCentral Media
