Cell C reports 12% revenue growth as it gains subscribers
Cell C on Tuesday reported a 12% growth in service revenue to R13.2 billion for the year ended December 2017.
Total revenue climbed to R15.715 billion, from R14.65 billion before.
The company said that CAPEX accounted for 8% of revenue at R1.2 billion.
Cell C reported a net profit of R4.1 billion for the year, on the back of a reported EBITDA of R7.8 billion, versus R3.1 billion in 2016, and benefiting from a once-off gain of R4.1 billion arising from the recapitalisation transaction.
The aim of the transaction was to generate a healthy and sustainable balance sheet for the business and combined with the turnaround strategy, this has been accomplished. The positive net equity of the business of R3.8 billion and the reduced debt from R17.7 billion to just over R6.8 billion are both indicative of the work put into generating a vigorous business, Cell C said.
The country’s third largest mobile operator reported total active subscribers of 16.3 million, up a million from 15.3 million in the prior period. It said that MVNO subscribers stood at 1.5 million.
Data subscribers, Cell C said, was at 12.6 million, up from 12.5 million, while data revenue now accounts for 40% of total revenue.
Average Revenue Per User (ARPU) declined to R73, from R76 in the prior period.
On its fibre-to-the-home initiative, “we see massive growth there,” said Cell C CEO Jose Dos Santos. He said that the company has passed 14,000 homes – paying customers – up from a little more than 1,700 homes a year earlier.
“While our turnaround strategy was put in place in 2012, the recapitalisation of Cell C last year has really allowed us to create a strong foundation for the business. Our plans now are to build out this strategy and really accelerate our growth and investment going forward,” Dos Santos said.
Cell C’s MVNO strategy and the growth in the wholesale division has also been a key contributor to revenue growth, with wholesale revenue increasing by 79% to R717 million, the chief executive said.
“Data usage per customer continues to grow off the back of the continued decreased cost per MB of data on the Cell C Network, which dropped by more than 36% year-on-year. We are also seeing more customers moving from feature devices to smart devices, partly due to the increased affordability of smartphones, especially company branded devices,” he said.
Data revenue increased by 29% and data usage increased by 90% year-on-year. The number of smartphones on the Cell C network increased by 21% year-on-year to 9.2 million devices. Cell C’s current active data customers increased to 12.6 million.
The data growth has largely offset the continued decline in voice based on customers selecting alternative platforms for communication and the effective price per minute also declined by 4% year-on-year. “This decline has become the new normal, and we expect it to accelerate over the coming years,” said Dos Santos.
Cell C said the network investment in 2017 was lower than in previous years, largely due to the slowed investment during the transaction period.
“This investment will increase going forward to ensure we keep pace with infrastructure and capacity needs and technological innovations,” said Dos Santos. Cell C now offers 3G services to 96% of the South African population. Cell C’s LTE-Advanced network, focussed predominantly in the metropolitan areas, covers approximately 32% of the population.
“We will invest significantly in our network over the next few years with an aggressive rollout of more LTE-Advanced sites.”
Loading ...