Prepaid specialist group Blue Label Telecoms plans to change its name to Blu Label Unlimited Group, the company said on Friday.
Blue Label, which sells prepaid vouchers for cellphone data, airtime and electricity, has long had a tenuous relationship with “Telecoms” in its name.
While its core business has been providing prepaid services to the telecom industry since its founding in 2001, the name implies that it operates an actual communications network in mobile, fixed line, fibre, satellite or otherwise.
Almost like a self-fulfilling prophecy, the group has found itself in more or less that position since acquiring a 45% stake in SA’s fourth-largest mobile operator, Cell C. Now, as the group moves to separately list Cell C, it is likely using the moment to try to re-establish itself as a technology company in the minds of players.
“Blue Label is undergoing a significant restructuring process that involves the separation of its telecom and nontelecom business units. In light of this strategic shift, the board believes it is prudent for the company’s name to reflect this new direction by omitting the reference to ‘telecoms’, the group said in a note to investors.
“Furthermore, the adjustment of the term ‘Blue’ to the abbreviated form ‘Blu’ aligns with the recent adoption of the trading name and logo ‘Blu’ across various marketing platforms. The board has therefore resolved to recommend the change of name to the shareholders of the company for their approval, deeming it a more fitting representation of the company’s evolving identity and business focus.”
In May, Blue Label — worth R12.97bn on the JSE — said it was considering spinning off Cell C as part of the group’s restructuring in a move that would see all four of SA’s largest telecom companies listed on the local bourse.
Cell C has long harboured ambitions of going public — a plan first floated by former CEO Jose Dos Santos in 2018. However, this plan came to naught as the company struggled to make a profit — making its initial public offering a challenging prospect for investors.
Cell C has struggled to make a profit since it opened in 2001. It had been laden with long-term debt of R8.7bn, prompting Blue Label and Lesaka Technologies (formerly Net1), which previously had a 15% stake, to write down their combined R7.5bn investment to nil.
Four years after this writedown, Blue Label said in February 2023 it had revalued the Cell C investment on its books to R962.5m, showing evidence of some positive momentum in the mobile business.
Blue Label earlier this year took a bullish tone on Cell C’s prospects saying the mobile network operator had turned around its business after languishing for years under a mountain of debt and an uncompetitive structure.
For now, the group has reserved the name with the Companies Intellectual Property Commission and the JSE, as it awaits shareholder approval, expected at a general meeting on August 11.
If approved, the company’s JSE long name and short name will change to Blu Label Unlimited and Blu, respectively.
Blue Label shares were 1.21% firmer on Friday at R14.20, adding to gains that have seen the stock rise 148.25% year to date and almost 409% in the past five years.
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