Cell C has reported a 12% growth in the number of active subscribers on its network. The company had 15.7m active customers at the end of June 2017, up from 14m a year earlier.
At the same time, however, the mobile operator, South Africa’s third largest, has reported a net loss of R588m for the first six months of the year, compared to a R3m profit previously.
The net loss came despite an 11% increase in revenue to R7.7bn. Service revenue climbed by 12% to R6.3bn, while data revenue jumped 33% to R2.6bn. Data traffic year-on-year rose by 84%.
Average revenue per user was R75, unchanged from the year-ago six-month period.
Blue Label Telecoms, Cell C’s largest single investor with a 45% stake, published the operator’s interim financial results on its website on Thursday morning ahead of a planned investor roadshow.
Capital expenditure came in at R561m, a sharp decline from the R1.7bn the company spent in the first half of 2016. That number is likely to rise sharply following the recent recapitalisation of the business, which saw its interest-bearing debts reduced to R6.1bn, from about R23bn previously.
In the presentation, Cell C warned that it is still facing legal and regulatory challenges from empowerment shareholder CellSAf to the recapitalisation, in terms of which Blue Label invested R5.5bn for a 45% stake and Net1 UEPS Technologies invested R2bn for a 15% stake.
CellSAf has lodged a complaint with communications regulator Icasa, arguing that Cell C did not follow the correct processes.
Icasa probe
“Based on the many and various detailed legal opinions from eminent senior counsel obtained by the parties to the recapitalisation, Cell C has in fact followed the correct process,” it said.
“Cell C has now made extensive written and oral submissions to Icasa providing details of the structure and effect of the transaction. We are awaiting Icasa’s decision as to whether to accept Cell C’s position or to refer the matter to the complaints and compliance committee for adjudication.”
CellSAf has also lodged a complaint with the Competition Commission and filed papers in the high court. “The recapitalisation is not a merger within the meaning of the Competition Act. Despite this, CellSAf has laid a complaint with the commission that Cell C has not obtained approval… Cell C has now made an extensive submission to the Competition Commission to explain the factual and legal position as to why this is not a notifiable merger.” — (c) 2017 NewsCentral Media
