{"id":871486,"date":"2026-08-21T10:37:52","date_gmt":"2026-08-21T08:37:52","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=871486"},"modified":"2026-08-21T10:37:55","modified_gmt":"2026-08-21T08:37:55","slug":"end-of-an-era-for-cell-c-in-south-africa","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/telecommunications\/871486\/end-of-an-era-for-cell-c-in-south-africa\/","title":{"rendered":"End of an era for Cell C in South Africa"},"content":{"rendered":"\n

Cell C has officially exited technical insolvency after years of financial distress, with a major balance sheet restructuring during its 2026 financial year helping the group\u2019s equity position shift from deeply negative to positive.<\/p>\n\n\n\n

The turnaround marks a significant change for the South African telecommunications company, which had been technically insolvent for several years, with accumulated losses leaving its liabilities greater than its assets.<\/p>\n\n\n\n

At the end of the 2025 financial year, Cell C reported a negative total equity of R8.30 billion. This followed the company\u2019s 2019 financial crisis, when it recorded a net loss of more than R8 billion.<\/p>\n\n\n\n

At the time, total liabilities of R23.2 billion exceeded assets of R18.4 billion. The company subsequently defaulted on debt payments.<\/p>\n\n\n\n

A major recapitalisation followed in 2022, led by parent company Blu Label. <\/p>\n\n\n\n

While the restructuring reduced short-term debt, Cell C remained technically insolvent, with negative equity of R9.294 billion by December 2022.<\/p>\n\n\n\n

The company then adopted an asset-light strategy, shutting down its own radio access network and moving customers onto MTN and Vodacom infrastructure.<\/p>\n\n\n\n

This reduced its infrastructure costs and improved operational efficiency, but the balance sheet remained under pressure. By the middle of 2024, liabilities still exceeded assets by about R3.2 billion.<\/p>\n\n\n\n

In May 2025, the negative equity position had narrowed to roughly R1 billion. <\/p>\n\n\n\n

The notable shift came during the 2026 financial year through a series of pre-listing transactions and Cell C\u2019s listing on the Johannesburg Stock Exchange on 27 November 2025.<\/p>\n\n\n\n

The company ended the latest reporting period with positive equity of R3.35 billion. <\/strong><\/p>\n\n\n\n

The directors and auditors said the improvement was \u201cprimarily attributable to the accounting entries arising from the IPO transaction\u201d.<\/p>\n\n\n\n

One of the most significant steps involved the waiver of debt owed to TPC, a subsidiary of Blue Label Telecoms.<\/p>\n\n\n\n

TPC waived R4.1 billion of debt, while a further R0.5 million was converted into Cell C shares. The transaction resulted in a non-cash gain of R3.53 billion from the derecognition of loans.<\/p>\n\n\n\n

No dividend declared <\/h2>\n\n\n\n
\"\"<\/a><\/figure>\n\n\n\n

Cell C also repurchased airtime previously held by TPC. The airtime had a face value of R8 billion, with the repurchase price of R7.37 billion settled through the issue of Cell C shares.<\/p>\n\n\n\n

This reduced contract liabilities by R2.42 billion, with the balance falling from R2.59 billion in 2025 to R173.95 million in 2026.<\/p>\n\n\n\n

The company said the restructuring involved \u201cextensive engagement with lenders, lessors, and shareholders\u201d and resulted in a significantly deleveraged balance sheet. It ended the year with what it described as \u201conly trading-level debt\u201d.<\/p>\n\n\n\n

Net debt fell by 64%, from R5.69 billion to R2.02 billion, while net debt to adjusted EBITDA improved from 4.29 times to 1.56 times. <\/p>\n\n\n\n

Adjusted EBITDA, excluding listing and restructuring costs, increased by 17% to R2.38 billion.<\/p>\n\n\n\n

However, the turnaround does not mean Cell C is free of financial pressure. <\/p>\n\n\n\n

The company still had a working capital deficit of R1.40 billion, with current liabilities of R4.78 billion exceeding current assets of R3.40 billion.<\/p>\n\n\n\n

Management acknowledged that \u201cwhile the Group continues to face liquidity pressures, its overall financial position has improved significantly\u201d.<\/p>\n\n\n\n

The reported net profit of R4.16 billion also needs to be viewed in context. <\/p>\n\n\n\n

It was boosted substantially by once-off, non-cash gains, including the R3.53 billion loan write-off and R474 million in lease termination gains.<\/p>\n\n\n\n

Operationally, Cell C reported growth in several areas. Prepaid net revenue increased by 9.7% to R5.81 billion, while prepaid subscribers rose by 1.3 million to 8.1 million.<\/p>\n\n\n\n

Wholesale revenue increased 20% to R1.76 billion, while MVNO subscribers grew by 27.3% and data traffic increased by 131%.<\/p>\n\n\n\n

Cell C also acquired 100% of Comm Equipment Company for R2.02 billion, restoring control over postpaid device financing and procurement.<\/p>\n\n\n\n

CEC contributed R907 million in revenue and R273 million in adjusted EBITDA during the second half of the year.<\/p>\n\n\n\n

Despite the improved financial position, Cell C faces further challenges. <\/p>\n\n\n\n

Regulated mobile termination rates reduced incoming revenue, while new data rollover regulations due to take effect in January 2027 could affect future revenue growth.<\/p>\n\n\n\n

Operating expenses also increased by 17%, partly because of listing costs, supplier debt cancellation fees, the CEC acquisition and higher IT costs during the transition.<\/p>\n\n\n\n

No dividend was declared for the year, with cash being retained to support liquidity and the company\u2019s ongoing financial restructuring.<\/p>\n\n\n\n

Key Financials (2025 vs. 2026)<\/strong><\/h2>\n\n\n\n

All figures are presented in R\u2019000 (unless otherwise specified) to preserve the exact precision of the Group’s financial statements:<\/p>\n\n\n\n

Financial Metric<\/th>FY2025 (R’000)<\/th>FY2026 (R’000)<\/th>YoY Change (%)<\/th><\/tr>
Total IFRS Revenue<\/strong><\/td>R11,138,167<\/td>R12,641,318<\/strong><\/td>+13.5%<\/td><\/tr>
Other Income<\/strong><\/td>R1,319,077<\/td>R4,875,215<\/strong><\/td>+269.6%<\/td><\/tr>
Direct Expenses<\/strong><\/td>(R7,720,889)<\/td>(R7,707,297)<\/strong><\/td>-0.2%<\/td><\/tr>
Adjusted EBITDA<\/strong><\/td>R2,037,000<\/td>R2,381,000<\/strong><\/td>+16.9%<\/td><\/tr>
Reported IFRS EBITDA<\/strong><\/td>R2,104,402<\/td>R5,508,516<\/strong><\/td>+161.8%<\/td><\/tr>
Net Profit for the Year<\/strong><\/td>R2,217,052<\/td>R4,160,285<\/strong><\/td>+87.6%<\/td><\/tr>
Basic Earnings Per Share<\/strong><\/td>148,537 cents<\/td>2,341 cents<\/strong><\/td>\u2014<\/td><\/tr>
Basic Headline EPS (HEPS)<\/strong><\/td>148,507 cents<\/td>2,338 cents<\/strong><\/td>\u2014<\/td><\/tr>
Total Assets<\/strong><\/td>R5,073,578<\/td>R10,238,736<\/strong><\/td>+101.8%<\/td><\/tr>
Total Liabilities<\/strong><\/td>R13,378,325<\/td>R6,889,117<\/strong><\/td>-48.5%<\/td><\/tr>
Total Equity<\/strong><\/td>(R8,304,747)<\/td>R3,349,619<\/strong><\/td>+140.3%<\/td><\/tr>
Current Assets<\/strong><\/td>R1,216,532<\/td>R3,395,368<\/strong><\/td>+179.1%<\/td><\/tr>
Current Liabilities<\/strong><\/td>R10,267,502<\/td>R4,784,195<\/strong><\/td>-53.4%<\/td><\/tr>
Working Capital Deficit<\/strong><\/td>(R9,050,970)<\/td>(R1,388,827)<\/strong><\/td>-84.7%<\/td><\/tr>
Net Borrowings (Net Debt)<\/strong><\/td>R5,691,217<\/td>R2,020,385<\/strong><\/td>-64.5%<\/td><\/tr>
Net Debt \/ EBITDA Ratio<\/strong><\/td>4.29x<\/td>1.56x<\/strong><\/td>-63.6%<\/td><\/tr><\/tbody><\/table><\/div><\/figure>\n","protected":false},"excerpt":{"rendered":"

Cell C has officially moved out of technical insolvency after years of financial distress\u2014alhough, it still faces some challenges. <\/p>\n","protected":false},"author":92,"featured_media":856731,"comment_status":"open","ping_status":"closed","sticky":true,"template":"","format":"standard","meta":{"_sma_x_autopost_status":"failed","_sma_x_autopost_error":"Instagram publishing failed: Instagram returned HTTP 400: Media ID is not available","_sma_x_post_id":"2090720320856445023","_sma_facebook_post_id":"191437357620492_2182390469248019","_sma_instagram_post_id":"","_sma_x_attempts":1,"footnotes":""},"categories":[21],"tags":[42,853],"class_list":["post-871486","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-telecommunications","tag-cell-c","tag-south-africa"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/871486","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/92"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=871486"}],"version-history":[{"count":2,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/871486\/revisions"}],"predecessor-version":[{"id":871489,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/871486\/revisions\/871489"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/856731"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=871486"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=871486"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=871486"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}