Cell C seeks profitability within 3 years

Mobile operator Cell C is on a three year path to profitability as it looks to muscle in on the market share dominated by its competitors MTN and Vodacom.

This is according to Bloomberg, and was confirmed by Cell C CEO, Alan Knott-Craig. It follows an injection of around R5.7-billion into the operator which, according to Knott-Craig, will primarily be used for network roll-out, particularly in the Gauteng area.

The cash comes from Oger Telecom, the Lebanese-controlled firm with an indirect 75% holding in the SA operator, which invested a further $350-million (around R3.5 billion) and key lenders “including Nedbank and the Development Bank of South Africa” which provided R2.2 billion.

According to Bloomberg, the most recent amount is in addition to a $200 million injection by Oger in 2012 while a “significant” amount is also earmarked for 2014.

Cell C is not obliged to provide its financial details, as it is not a public company, and has not done so since Knott-Craig took the reins in January 2012.

For the 12 month period to the end of December 2010, Cell C had R7.5 billion in long-term debt and an additional R500 million in current liabilities.

Revenue improved to R10.2 billion, while earnings before interest, tax, depreciation and amortisation stood at R1.4 billion.

Knott-Craig told media at the company’s headquarters in Sandton on Wednesday (17 July), that operators in SA needed a market share of between 20-25% to be profitable.

South Africa’s third operator claimed on Wednesday (17 July) that its subscriber numbers had swelled to 11.5 million, from nine million over the past 18 months, giving the group an approximate 14% market share.

This compares to rivals Vodacom, which has 29.282 million (June), MTN which has 24.95 million (March), and Telkom Mobile at 1,54 million customers (March).

Noting the group’s success over the past 18 months, Knott-Craig said: “we are hoping to keep this kind of growth growing over the next couple of years.”

More on Cell C

Cell C: where the billions will go

Investors knocking on Cell C’s door

Saudi Telecom takes big hit on Cell C spend

Cell C talking to MVNO players: report

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Cell C seeks profitability within 3 years