Cell C boosts base to 15.3m

Cell C headquarters in Buccleuch, Johannesburg. Photo: Simphiwe Mbokazi

Cell C headquarters in Buccleuch, Johannesburg. Photo: Simphiwe Mbokazi

Published Mar 14, 2017

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Johannesburg

– Cell C – SA’s third-largest network – has grown its network from 12.8 million

to 15.3 million customers.

The

company, which reportedly owes more than R8 billion in debt and is in the midst

of selling a 45 percent stake to Blue Label for R5.5 billion, says it

has posted its first profit.

The company on Tuesday says its financial results for the

year to December shows a profit

of R540 million. The profit follows strong operational and financial growth across

key financial indicators, it says.

“The

2016 financial year was exceptionally challenging, with South Africa’s economic

growth essentially flat.  Despite this, the company delivered solid

results,” says CEO Jose Dos Santos.

Cell C

increased revenue by 11 percent to R14.6 billion and service revenue by 8

percent to R11.8 billion in 2016. 

“The

strong revenue growth was the result of a focused strategy of innovation,

exceptional value in product offerings and a customer-centric approach to how

Cell C services its customers.” Says Dos Santos.

Cell C, founded in 2001 by Saudi Arabia's Oger Telecom,

has struggled to compete against established players Vodacom and MTN Group.

Service

revenue was driven largely by the growth in data volumes, which increased by 67

percent in the reporting year. Data revenue was up 35 percent year-on-year to

R4.4 billion.

“While

we did see a marginal decline in traditional voice traffic, in favour of other

voice technologies, this was offset by the massive data growth,” says Dos

Santos.

Read also:  Telkom sets sights on Cell C's debt

Cell C

was recently the subject of an unsolicited bid from Telkom, which offered R13

billion for the company. Net1, embroiled in a welfare payment dispute, will also

acquire a 15 percent stake in Cell C for R2 billion.

Those deals will see its debt reduced substantially.

Cell C

says its earnings before interest, tax, depreciation and amortisation gained 59

percent to R3.1 billion, and that margin moved from 15 percent to 21 percent.

During

2016, Cell C invested about R3.4 billion in its network and other fixed and intangible

assets, rolling out

predominantly LTE and LTE-Advanced.  Cell C’s total capital expenditure

over the last four years amounted to more than R11.6 billion.

“We’ve

delivered on our promise to provide real value to consumers and despite already

offering some of the lowest tariffs in the market, Cell C reduced the effective

data rate by more than 20 percent during the last financial year,” notes Dos

Santos.

BUSINESS REPORT ONLINE

 

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