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<\/a><\/p>\nHow we got here<\/strong><\/p>\n Having launched into the local market some 18 years ago, Craigie Stevenson said that under-capitalisation of the business over many years resulted in signing punitive contracts to finance growth<\/p>\n The chief executive said that tower agreements (2011) and other risk-based pricing on certain contracts have created significant financial drag on the business.<\/p>\n In addition, the company has often operated in stop-start scenarios due to the uncertain capital structure, he said.<\/p>\n He also pointed to questionable operational decisions, including the group’s most recent streaming venture, Black. He said that poor decision-making drove cash consumption without returns.<\/p>\n Craigie Stevenson said that growth in customers and revenue were inconsistent and did not convert into positive cash flow – adding that competing with two strong incumbents drained cash resources and increased debt.<\/p>\n He said that while the group followed the mandate of customer growth and revenue growth, these targets did not convert into positive cash flow for Cell C.<\/p>\n Stevenson said that there is still an opportunity for Cell C in the market, especially considering the value of its assets. “We have significant valuable assets and some of them are underused.”<\/p>\n He said that Cell C had valuable spectrum, a large customer base of 16 million active users, a wide distribution network, and a valuable brand \u2013 all of which it could leverage to improve its position.<\/p>\n Cell C’s distribution channels includes over 240 stores.<\/p>\n “Cell C has definitely not stagnated, we are generating service revenue,\u201d Stevenson said. \u201cIt is also a part of the adjustments that we are making.”<\/p>\n “As we redevelop our product portfolio, we will focus on making sure we understand what type of products to offer to our customers.”<\/p>\n “We are getting the business into the right place,\u201d he said. \u201cWe are getting rid of costs, getting more efficient, and understanding what a performance culture is all about.”<\/p>\n Stevenson stated that the company needs to be more efficient than any of its competitors to recover and improve its position going forward.<\/p>\n \u201cWe need to be more efficient than anybody in this business. We cannot do about R1.5 billion a month in turnover and make a loss.\u201d<\/p>\n Green shoots?<\/strong><\/p>\n Craigie Stevenson provided a quarterly overview, alongside the measures the company is taking to turn the business around.<\/p>\n In Cell C\u2019s last quarter performance (tended August 2019) the group highlighted:<\/p>\n \u201cOur turnaround strategy is focused on ensuring operational efficiencies, restructuring our balance sheet, implementing a revised network strategy and improving our overall liquidity,\u201d he said.<\/p>\n \u201cCell C has a real opportunity to address its historical performance through a focus on operations that will restore shareholder value. We are convinced that our wide-ranging operational initiatives will position Cell C for long-term success.\u201d<\/p>\n Some of the initial changes being introduced to turn the business around include:<\/p>\n Craigie Stevenson said <\/span>that by executing on its focused turnaround plan, Cell C will dramatically improve its financial profile\u00a0and deliver a streamlined business.<\/span><\/p>\n\n
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