Blu Label Unlimited Group’s 2025 annual report, published on Wednesday, again confirmed what has been talked in the market for months: Cell C is likely to soon find its way onto the JSE. The surprise is that the bigger story here may not be Cell C’s listing but what the move would mean for Blu Label.

The annual report positions a listing as the “culmination of years of stabilisation, investment and governance-led transformation” at the mobile operator. Under a capital-light model that leans on roaming deals with partners – and rivals – MTN and Vodacom, instead of its own expensive network build-out, Cell C’s executive team has improved liquidity and helped steady operations.

But for Blu Label (previously Blue Label Telecoms), which has carried both the financial and reputational baggage of Cell C for years, spinning off the asset in the form of a listing would be a strategic inflection point. The annual report is on-point on this: the potential listing would “free up capital, reduce debt and enable sharper strategic focus” for Blu Label.

A listed Cell C, standing on its own balance sheet for the first time in years, would allow Blu Label to accelerate its push into high-margin, asset-light digital distribution – prepaid services, merchant enablement and fintech platforms. Those are businesses where transaction volumes are rising, margins are edging higher and Blu Label is no longer constrained by the demands of propping up a national network.

With Cell C structured as a separately listed entity, Blu Label’s leadership could tell a simpler story to investors: a cleaner, cash-generative distribution platform with no hidden obligations.

For years, Cell C has been the question mark hanging over Blu Label’s valuation. A listing would finally allow each business to be priced – and judged – on its own merits. The expectation of that, and the turnaround already evident at Cell C, has helped propel Blu’s share price higher this year: it has more than doubled since 1 January.

Capitec connection?

Many people may choose to frame these developments as Cell C’s comeback; the bigger win may be Blu Label’s escape from the long shadow of its most complicated investment.

But could an even bigger picture be at play here? There’s nothing on the table (that TechCentral is aware of), but could fast-expanding banking group Capitec make a move on Blu Label – and by extension, Cell C (or some combination thereof)?

Capitec has been doubling down on mobile and value-added services. In its latest interim results, published on Wednesday, fintech services (including Capitec Connect, airtime sales and other value-added services) contributed more than a quarter of group earnings (26%), with transaction volumes climbing fast. For Capitec, mobile isn’t an add-on anymore; it’s a growth pillar and an increasingly core part of its business.

Read: Capitec mobile, services now drive over a quarter of revenue

Dalene Steyn, who heads Capitec Connect, told TechCentral in an interview in March that the business was aiming to double its mobile customers to three million by next February. She’s been quoted elsewhere as saying the target is to reach as many as 10 million subscribers within the next three years.

Blu Label, meanwhile, is positioning itself as a platform-led mass-market distributor, with deep reach into prepaid airtime, electricity, financial services and merchant solutions.

Dalene Steyn Capitec Connect — Capitec Connect head Dalene Steyn

Together, Blu Label and Cell C control pipes, distribution and customer relationships at the lower- to mid-income end of the market – the same consumer segment Capitec dominates in banking.

On paper, there are clear synergies: Capitec could bundle mobile, banking and fintech more tightly, cross-sell aggressively and own a closed loop from airtime to lending to payments. It would also give the bank direct control of distribution infrastructure and merchant touchpoints.

The hurdles, though, are significant. Cell C’s long history of debt restructuring, shareholder disputes and regulatory scrutiny makes it a complex acquisition target. Capitec has built its reputation on operational simplicity and low risk; swallowing a telco with a chequered past could muddy that brand. Regulators would also scrutinise a bank owning a mobile operator and one of South Africa’s largest airtime distributors, raising competition and financial stability questions.

Still, if Cell C lists successfully, the separation from Blu Label could make a transaction a lot cleaner. Capitec could take a strategic stake in Blu Label, without necessarily owning any shares in Cell C directly.

A deal with Blu Label would make more sense for Capitec than investing directly in Cell C for other reasons. These include:

The competition concerns that might arise in buying a stake in a mobile operator that serves other banking mobile virtual network operators, namely FNB and Standard Bank. There’s also the risk that a direct investment could chase those banks into the arms of other infrastructure providers, such as MTN, Vodacom or Telkom.
Buying control of Cell C would introduce regulatory scrutiny, including the need to transfer spectrum licences and result in additional red tape it would rather not have to deal with.
Blu Label, TechCentral understands, already facilitates a lot of the fintech backend services for Capitec. Buying the company would give it greater control over how those services are provided – and reduce risk for the bank.

If Capitec were to buy Blu Label, it wouldn’t cost much relative to Capitec’s size – the latter’s market capitalisation is a mere R11-billion versus the former’s staggering R412-billion (as of Wednesday’s close in Johannesburg).

Read: Capitec’s next big move in mobile

Capitec is becoming more of a fintech company, with Blu Label quietly powering some of that. Capitec buying Blu would make financial and strategic sense. It would be a relatively cheap deal for Capitec, it would protect Capitec Connect in the longer term and it would set up the bank to compete in the coming bank-fintech-telco convergence wave. — © 2025 NewsCentral Media