Is Cell C up for sale?

Fresh comment from Cell C’s new CEO, Jose Dos Santos, has again raised questions of whether the company is up for sale – or open to a merger deal.

Speaking at the company’s new headquarters in Midrand on Tuesday (14 May), Dos Santos said:  “I think this industry will see some consolidation. I chat to everybody, everybody loves me.”

“Chats have never stopped. We talk to everybody. I think these are exciting times,” the CEO said.

Dos Santos said that, when the time was right, the company would make some statements “on what is happening”.

Former Cell C CEO Alan Knott-Craig said in 2013 that Cell C would need to be swallowed up by a “larger group to compete with the likes of Vodacom and MTN”.

The group has for some time been linked to a merger with Telkom, through its mobile arm, with Knott-Craig admitting that he had spoken with the operator over a potential deal.

Those discussions however, appear to have dried up.

In March, MTN signed an agreement with Telkom, which would see it take over financial and operational responsibility for the rollout and operation of Telkom’s radio access network (RAN).

The two companies entered into a Heads of Agreement (HoA) to enable each party to be able to roam on either party’s network.

Knott-Craig has long reasoned that there is no room for four mobile operators in South Africa, and that consolidation between firms was inevitable.

On Tuesday, South Africa’s third mobile operator noted that it has signed up a record 1.6 million new subscribers in March 2014, taking its total subscriber base to 16.6 million.

Dos Santos said that the group’s total revenue increased 14% year on year, with subscribers up 35% YoY to the end of December, 2013.

Looking ahead, Dos Santos said that the group’s capex forecast for 2014 is at R2.3 billion in 2014.

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Is Cell C up for sale?