Cell C taking action to fix its lacklustre performance
DURBAN - TELECOMS operator Cell C is having to rethink how it runs its business and taking action to address what it called “the many years of significant underperformance” to shore up its financial position.
Cell C chief operations officer Andre Ittmann said in an interview that it would continue implementing its operating model in line with its network strategy that offered customers quality network access as a buyer and aggregator of wholesale network capacity by partnering with two large network operators via roaming arrangements.
“We had to rethink how we ran the business; be honest with ourselves about the state the company was in and had to take courageous actions that would address the many years of significant underperformance to build a solid financial position,” said Ittman.
The company said it would also focus on developing innovative service offerings.
Ittman said Covid-19 forced them to relook at the way they operated during the pandemic and beyond.
In October, Cell C said its net loss after tax had widened to R7.5 billion mainly as a result of one-off costs and adjustments. The net loss after-tax had widened in June from an R875 million loss last year and had included the impairment of R5bn worth of assets due to the new MTN network arrangement.
It also said at the time that it had incurred once-off recapitalisation and restructuring costs and that reported earnings before interest, taxes, depreciation and amortisation was lower at R1.2bn from R1.4bn in 2019.
At the time, Cell C reported its overall revenue was at R6.9bn compared to R7.4bn in the six months of the previous year.
Bloomberg reported that the mobile operator had put core parts of the business up for sale as it struggles with R9bn of debt and deepening losses.
Cell C was recently also overtaken by Telkom as South Africa's third biggest mobile operator after Vodacom and MTN. The switch resulted from the decline in growth by Cell C, coupled with surprising surges from Telkom's user base.
The company said that its turnaround strategy had started to yield results as demonstrated by their second half and first half of the year financial results.
Ittmann said various operational efficiencies addressed and greatly improved thereby setting the foundation for Cell C’s new business model during 2020 and beyond.
Cell C said it had also significantly progressed in changing its business model up to now as a buyer of wholesale capacity and expanding its coverage in conjunction with their various roaming agreements.
Ittmann said having been awarded level 2 B-BBEE status markedly increased the company’s scope for growth in the South African economy.
It added that it would continue to identify and support incorporating small and medium enterprises as well emerging enterprises into its overall value chain.