Communications regulator Icasa has approved the transfer of Cell C’s spectrum and network licences to Blue Label Telecoms, paving the way for the JSE-listed technology company to take control of the mobile operator.
Blue Label’s share price has moved strongly higher in recent days, possibly because the news leaked into the market that the transfer of the licences had been approved.
An Icasa spokeswoman confirmed to TechCentral on Thursday that the regulator had approved the licence transfers; a spokeswoman for Cell C also confirmed the transfers had been given the green light.
Currently, Blue Label has a non-controlling 49.5% stake in Cell C but is moving to take control of the company, which it rescued through a series of recapitalisations aimed at bolstering the troubled company’s balance sheet.
Under new leadership, led by CEO Jorge Mendes, Cell C appears to be on the mend, offering potential upside to Blue Label, whose share price has underperformed for years because of its investment in the operator.
At Icasa hearings last September, Cell C said its application to transfer the licences to Blue Label subsidiary The Prepaid Company (TPC) did not represent a “stripping of assets” by Blue Label as some stakeholders, including Cell C’s empowerment shareholder CellSAf, had claimed.
Wim Trengrove SC, for Cell C, told a panel of Icasa councillors that the operator would continue to own the licences, despite the transfer of control to TPC.
Confusion
“Some of the submissions reflect confusion about the nature and purpose of the application. CallSAf seems to think that, if the application is approved, the licences themselves will be transferred out of Cell C and that TPC will be the licence holder going forward. This is inaccurate,” Cell C said in a written submission to Icasa ahead of the hearings.
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The application to Icasa by Cell C was triggered by TPC’s move to increase its stake in the mobile operator from 49.53% go 53.57%, meaning TPC would then have control of Cell C.
The name of the spectrum licence holder (Cell C) will not change, only the names of the shareholders. This also means that from an accounting perspective, the spectrum assets owned by Cell C will continue to sit on Cell C’s books and not those of TPC or Blue Label.
“Cell C will continue to hold its licences post-transaction and will continue to provide the licensed services in accordance with its licensing conditions,” said Trengrove.
Meanwhile, the Competition Commission recommended to the Competition Tribunal last April already that the transaction should be allowed to proceed, subject to certain conditions to “mitigate information exchange concerns” and to ensure the “continued use of certain prepaid airtime distribution channels for a period post-merger”. However, the tribunal still hasn’t given its consent.
Blue Label Telecoms executives could not immediately be reached for comment on Thursday. The company’s share price reached a 52-week high in intraday trading on Thursday of R6.20/share. The shares have gained 71% in the past 12 months on the expectation that a turnaround at Cell C could meaningfully boost Blue Label’s valuation. – © 2025 NewsCentral Media
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