Mobile operator Cell C has narrowed its losses in the first half of the year, according to the group’s results, published by Blue Label Telecoms on Tuesday.
The group reported an 11% jump in service revenue to R6.86 billion for the period ended June 2018, from R6.2 billion in 2017. Total revenue was up 5% to R7.8 billion, while earnings before interest, taxes, depreciation, and amortisation (EBITDA) was up 16% to R2.4 billion.
The operator posted a net loss of R645 million for the period, reduced by 33% from R968 million reported in 2017. Foreign exchange and financial instrument exposure contributed to the net loss, it said.
The group said that despite difficult economic conditions, it managed to grow its total active subscriber base by 600,000 customers to 16.3 million.
Data revenue was up 20%, with data traffic up 62% compared to the same period last year. Data revenue now makes up 52% of mobile revenue compared to 46% the previous year, despite the effective price of data per MB decreasing by more than 28% year on year.
Cell C said its MVNO strategy delivered strong growth in the wholesale division, specifically driven by customer data usage which generated the bulk of the revenue growth. Wholesale revenue increased by 51%, to R486 million and MVNO subscribers increased by 31%, from 1.3 million to 1.7 million, it said.
“Following the measures put in place as part of our turnaround strategy, we are seeing both a satisfactory financial performance to date and increased value offering for our customers. We have focused our efforts on innovation and improving our network coverage and quality as well as customer experience and will continue to build on our strong foundation with revenue projected to perform promisingly,” said Cell C chief executive officer, Jose Dos Santos.
Operationally, Cell C said it is on track to improve both its network coverage and quality through a “build and buy” strategy.
“Earlier this year we concluded a far-reaching roaming agreement with MTN to complement our own high quality network. The agreement provides our customers with wider 3G and 4G coverage, as well as automatic and seamless roaming access.
“This means that where a customer is on a call that happens to switch from a Cell C tower to a MTN tower, the call will not be dropped. This agreement allows us to now increase our capital investment during H2 in areas where we’ve chosen to build coverage and capacity,” said Dos Santos.
The rollout of this multi-billion-rand long-term roaming agreement has already begun and areas currently benefiting from this deal include Witbank, Middelburg, Secunda, Ermelo and Standerton. The implementation is expected to conclude by November and as a result, 4G access will increase from 33% population coverage to 80%.
The company’s 2G and 3G population coverage is at 99% and 96% respectively.
The operator said its fibre-to-the-home offering, C-Fibre, has also seen considerable growth for the period with over 100% in both base and revenue growth.
New C-Fibre connections increased from 3,733 in the same period to 16,425. The offering was launched in 2016 with open access Fibre Network Operators (FNO) and has continued to grow by launching on four new open access networks earlier this year.
“Cell C will continue to focus on providing value based products and services to the South African consumer and we are continuously looking at strategic partnerships to enhance the value that we offer customers,” Dos Santos said.