Cell C has secured several corporate clients as it steadily grows its enterprise segment, identified as one of the company’s key growth levers.
CEO Jorge Mendes said the pipeline in the private sector was healthy. “We have concluded some and are executing on them, and revenue is not showing yet. That will show some improvement in the second half.”
The mobile services and data provider is also partnering with technology companies to bid for government tenders to provide a wide range of technology and communications services. “There are a number of tenders still on the table,” Mendes said.
He added that while enterprise remained a smaller part of the revenue mix, it “represents an important growth opportunity for Cell C”, currently delivering double‑digit growth and partially offsetting pressure elsewhere in the portfolio.
“It’s growing above 10%, and I think it’s going to become meaningful in the future. You’ll see that unfold over the next while, as market perception starts changing ... around our network quality and our capability. We’ve landed contracts.”
Prepaid subscribers increased by more than 1-million to 7,8-million. Revenue from the prepaid business rose 1.6% to R2.7bn, about half of Cell C’s total revenue of R5.6bn
Cell C — which recently listed on the JSE — released its maiden six-month financial results for the period ended in November.
Prepaid subscribers increased by more than 1-million to 7,8-million. Revenue from the prepaid business rose 1.6% to R2.7bn, about half of Cell C’s total revenue of R5.6bn.
Growth in prepaid was boosted by an expanded distribution network beyond the company’s own store channels. Last year, Cell C entered into a commercial arrangement with the Pepkor group — owner of Ackermans, Pep, HiFi Corporation and Incredible Connection — to add the mobile operator to its FoneYam, a cellular rental business. FoneYam has rented 2.3 million entry-level smartphones, giving Cell C access to thousands of Pepkor stores.
In the contract (postpaid) segment, subscriber numbers declined by 63,000 following a deliberate clean-up of the base, bringing the total to 785,000. Revenue was up 2.3% to R1.2bn.
The wholesale business, made up of mobile virtual network operator (MVNO) partnerships, recorded a revenue growth of 22.5% to R840m, with subscribers rising 29% to 5.1-million. Data usage for MVNO subscribers increased, with traffic per user up 86% year on year, “supporting the strong growth”, said Mendes.
MVNOs are companies that use Cell C infrastructure to offer their own branded mobile and voice services. They include FNB, Old Mutual, Mr Price and Capitec.
“We’ve improved distribution on wholesale by another four wholesale partners that we brought on board in the postpaid segment,” Mendes said. “We’ve also integrated into iStore — that went live after this reporting period and is in full swing.
While the market remains highly competitive, we are encouraged by the improved momentum across our core operations, particularly in prepaid and wholesale, alongside the considerable progress made in strengthening our balance sheet
— Jorge Mendes, Cell C CEO
“It’s still in the early stages … but it’s given us access to a high-value channel of around 42 stores. Through our MVNO business, our distribution footprint is large, including ShopRite, Capitec and FNB.“
During the six‑month period, Cell C completed upgrades to 37 stores, bringing the total number of upgraded stores to 72 out of 104.
“We are continuously assessing our distribution footprint — where we need to serve customers, in a physical vs a digital channel,“ Mendes said. ”It’s likely we will grow the 100 franchise stores, but that will be done on a requirement and needs basis ... [and whether] we’re underserved in a particular geography.”
Mendes expects wholesale performance to remain strong, sustaining growth above 20% year on year, driven by continued momentum in MVNO partnerships, with more companies expected to join the platform.
Cell C’s prepaid business roams on MTN’s network, while its contract customers use Vodacom.
Commenting on half-year performance to November, Mendes said: “While the market remains highly competitive, we are encouraged by the improved momentum across our core operations, particularly in prepaid and wholesale, alongside the considerable progress made in strengthening our balance sheet. These results reflect an intentional and sustainable strategy, positioning Cell C to deliver long-term value for shareholders, customers and partners.”
Business Times
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