Cellular network operator Cell C is about to conclude the sale of its 50% stake in Virgin Mobile SA, TechCentral has learnt exclusively from a well-placed industry source.

The deal must, however, still be referred to the Competition Commission for approval.

It’s not known who is buying the Cell C stake — the other 50% of the business is owned by Richard Branson’s Virgin Group — but previous speculation has centred on JSE-listed Blue Label Telecoms.

There are also rumours circulating that a local cellular handset distributor is interested in the stake.

Blue Label co-CEO Brett Levy told TechCentral recently that the company has no plans to purchase the Cell C stake, though he confirmed there were initial talks between the parties.

Virgin Mobile marketing director Jonathan Newman says the company is “not able to comment on speculation”. A Cell C spokesman could not be reached for comment.

But TechCentral’s source is adamant the deal is all but done.

The source says Virgin Mobile will continue to utilise Cell C’s network, and is in talks to roam on the 3G network the cellular operator is constructing.

Though Virgin Mobile had a troubled birth in SA, the company appears to have turned the corner.

Newman says Virgin Mobile has shown strong growth in the past year and now has about 300 000 subscribers on its books, of which 90% are of the more lucrative contract kind.

In the first five months of 2010, the company’s prepaid subscribers have grown 95% compared the same period last year. And sales in stores have jumped about 80%.

Newman says also that Virgin Mobile has been Ebitda-positive since October last year. Ebitda is a company’s earnings before interest, tax, depreciation and amortisation are included.

He attributes the company’s strong performance over the past year to new packages, especially ones offering large bundles of free SMSes, as well as improvements in the quality of its customer care centre. — Duncan McLeod, TechCentral