Cell C puts assets up for sale as losses deepen
Blue Label shares have slumped 47% in 2019, and the group is now valued at R2.6bn
SA’s third-biggest mobile operator has put core parts of the business up for sale as it struggles with R9bn of debt and deepening losses.
Cell C’s fibre-optic network is among the assets up for grabs, according to people familiar with the matter. The carrier is also in talks to sell access to some of its wireless frequencies to larger rival MTN Group, said the people, who asked not to be named as the plans are private.
The asset sale has attracted interest from MTN, Vodacom Group and Telkom, the former state landline monopoly that’s growing its mobile business, said the people. All three declined to comment.
“Cell C will look at any opportunity that will assist with the company’s long-term viability and sustainability. Any opportunity needs to undergo a due diligence process that takes into account all stakeholders,” a spokesperson said.
The dominance of Vodacom and MTN in the local telecoms market has hampered smaller rivals such as Cell C, which has come close to collapse on previous occasions and in 2016 was rescued by a funding plan led by Blue Label Telecoms. Cell C is also in talks with MTN about gaining more access to the latter’s network, CEO Douglas Craigie Stevenson said in September.
Telecoms operators are looking at scaling up their fibre offerings and customer base to increase revenue in the absence of a much-delayed state sale of new spectrum, which will increase the availability of high-speed internet. A disagreement between the government and the telecommunications regulator about how to proceed with the auction has delayed it to the first quarter of 2021 at the earliest.
Blue Label shares have slumped 47% in 2019, and the group is now valued at R2.6bn.