Mobile operator Cell C has net debt, excluding leases, on its balance sheet (prior to a planned recapitalisation) of almost R10-billion, but it still wants to participate in South Africa’s upcoming spectrum auction.
That’s according to CEO Douglas Craigie Stevenson, who said in an interview with TechCentral on Tuesday following the publication of the company’s interim results to 30 June that it plans to petition communications regulator Icasa and the government to allow it to lease access to spectrum instead of buying it upfront. He wants “creative models” to allow the company to participate along with its bigger rivals.
Is it feasible for Cell C to participate in the auction? “It would be completely unfeasible if I did not try,” Craigie Stevenson said. “As long as I am building a future business and I have a balance sheet that starts me off and I can get value out of the spectrum to carry my customers on another network … why must I be excluded from the spectrum race?”
Cell C is in the process of moving its radio access network – the RAN connects its base stations to consumers’ devices – to MTN Group’s South African unit as it seeks to reduce capital expenditure and ensure it doesn’t again get into an unmanageable debt situation following the planned recapitalisation involving its shareholders and lenders, which, according to Craigie Stevenson, is now near finalisation.
He said he does not agree with a view that the big incumbent networks, namely Vodacom and MTN, should be the only ones to get access to spectrum under Icasa’s licensing process, which will see spectrum auctioned off by March 2021 at a cost to successful bidders running into billions of rand.
“There are huge opportunities here. I don’t want to be out of the action. If I have to go to the government and ask them for a special deal, (and tell them) that I have a sustainable business to be in the spectrum (licensing game), surely they have to at least listen to me?” he said.
“What precludes me from going to Icasa and saying I will have a whole different set of obligations? We have to be creative about this. I just don’t want to be excluded. That was the natural thought – ‘they don’t have money; they won’t be in it’ – but that marginalises us.”
Craigie Stevenson said “nothing is cast in stone” once the recap has been concluded and Cell C starts producing what he called “new-model” financial results. “I will happily go and sit with the Icasa guys about spectrum and have a long discussion (with Icasa CEO) Willington (Ngwepe) and the Competition Commission guys and say to them, ‘Why can’t I have access to spectrum?’” — © 2020 NewsCentral Media