Cell C eyes public listing in 2019 or 2020
Mobile operator Cell C aims to go public in late 2019 or in early 2020, CEO Jose Dos Santos says.
"The intention is to list [Cell C] in the fourth quarter of 2019 or the first quarter of 2020," Dos Santos said in an interview in Johannesburg on Tuesday.
Cell C’s ownership structure changed in 2017 after it received an equity injection that slashed debt. JSE-listed Blue Label Telecoms and Net1 bought 45% and 15%, respectively.
On Tuesday, the company said it grew service revenue by 12% to R13.1bn in the year to December, but recorded a net loss of R26m after stripping out a R4.1bn debt haircut.
"We’re still net negative in terms of cash flow, but we think that will come right towards the end of the year or first quarter of next year," Dos Santos said.
The company would use its cash injection and strengthened balance sheet to grow revenues, and this would "filter down to free cash flow".
Cell C would spend R3bn to R3.5bn a year on capital expenditure over the next three years. The firm, which has a roaming agreement with Vodacom, would focus on building its network in urban areas.
Capex dipped to R1.2bn in 2017, from R2.3bn a year before, owing to funding constraints in the months leading up to the recapitalisation. Dos Santos said Cell C wanted to become the "number two or number one" provider of fibre-to-home services in SA.
The company had acquired two fibre businesses and was in discussions with other potential targets in the sector.
"There’s a lot of consolidation [in fibre], it’s a capital-intensive business. The smaller [operators] are feeling the heat and that gives us the opportunity to go out there and buy those subscribers and customers."
Dos Santos said the fibre-to-home market would grow as more infrastructure was rolled out and as older generations warmed to the idea of having uncapped internet.
Meanwhile, Cell C wanted the government to "fast track" the release of spectrum.
Dos Santos said Cell C supported a proposal in the Electronic Communications Amendment Bill that mobile operators share resources.
The bill proposes the establishment of a wholesale open-access network (Woan) to house shared spectrum. Dos Santos said he saw "more pros" with the Woan than negatives.
"You are never really going to get cost efficiencies unless you do infrastructure sharing.
"In most part of the western world, networks share infrastructure, but in SA we still don’t," he said.
Dos Santos said the Woan entity would eliminate the duplication of resources, and this would help drive down prices for customers.
Cell C said while "effective" data prices fell 36% in 2017, data revenue had risen 29% on increased usage.
Data now accounted for 40% of revenues.
THE FIRM, WHICH HAS A ROAMING DEAL WITH VODACOM, WOULD FOCUS ON BUILDING ITS URBAN NETWORK