STC talks up Cell C revenue
Saudi Telecom Company (STC), which indirectly owns a significant stake in Cell C, says that it witnessed a 23% growth in revenue in its controlled subsidiaries, in Q1 2013, compared to the same period in 2012.
This would include South Africa’s third operator as, in 2008, STC invested $2.6 billion in a 35% stake in Oger Telecom, the Lebanese-controlled firm which has an indirect 75% holding in Cell C.
On Monday (22 April), STC announced its financial results for the three months ending March 2013, with net income down to SR1.550 billion (R3.84 billion) compared to SR2,521 billion (R6.25 billion) for the corresponding quarter last year, with a decrease of 38.5%.
The latest figured however, show a whopping 231% increase from SR468 million generated in the prior quarter, as the company cited the re-evaluation of its investments fair value in in Cell C and Aircel (India) during the fourth quarter, which resulted in recognising a one-time, non-recurring and non-cash charge of SR641 million (R1.506 billion) provisions from impairment of intangible assets.
STC said at the time (January 2013) that its investments in India-based Aircel, Cell C and Axis, were not performing up to expectations, “and we intend to employ continued focus to enhance the performance of these companies.”
International turnaround
However, on Monday STC said that, with regards to international operations, it continues to grow subsidiaries & affiliate companies operations driven by continued subscriber additions.
“During Q1, 2013 the group witnessed revenue growth of 23% in the controlled subsidiaries compared to same period last year, driven by continued market share growth in post-paid, pre-paid and wireless broadband services”
“With that, STC will continue to employ more efforts and continued focus to enhance the performance of Aircel, Cell C and Axis operations,” STC said.
STC’s subscriber base as of Q1, 2013 exceeded 170 million.
Domestically, STC said it continued to deploy 3G & 3.5G networks to reach various parts of the country and continued with deploying 4G network to reach more than 5,000 sites.
Cell C
Business Times reported on Sunday (21 April) that Cell C’s future will depend on partnering with a large local telecoms player like Telkom, or by finding a foreign partner with ‘deep pockets’.
According to the report, Cell C CEO Alan Knott-Craig said that Cell C would need to be swallowed up by a “larger group to compete with the likes of Vodacom and MTN”.
“We are averaging between 800,000 and one million gross connections in a month,” Knott-Craig told Business Times.
The chief executive sayid that it remains possible for Cell C to gain a 25% share of South Africa’s cellular market.
Cell C last reported its results for the year ended 2010, with pre-tax earnings of R1.4 billion, and a revenue of R10.2 billion.
The group also pointed to its long-term debt of R7.5 billion, and R500m in liabilities during the team, which were required to be settled last year.
More on Cell C and STC
25% market share achievable: Knott-Craig
Cell C looking for partner: report
Cell C backer sees CEO step down
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