Mergers, Acquisitions and Financial Results

CELL C has followed up the daunting results issued by larger rivals MTN and Vodacom last month with figures of its own showing strong results for the September quarter.

While Vodacom and MTN were the undoubted giants of the market, Cell C has said it has increased market share in terms of revenue by 13.8% year on year.

Its revenue of R1.4bn for the quarter was up 35% from R1bn a year ago, while earnings before interest, tax, amortisation and depreciation of R135.4m were 54% higher than in the previous quarter.

CEO Talaat Laham said last week that Cell C had succeeded in bringing significant competition to the market, and the company enjoyed excellent year-on-year growth, with strong improvements in subscriber numbers, revenue and operating profit.

Cell C has 2,7-million active subscribers, who each spend an average of R153 a month, up from R142 a year ago. The rise in average spending was achieved by increasing the proportion of customers who hold contracts with the company, as opposed to prepaid users.

Contract customers typically spend more on their airtime every month.

During the three-month period, Cell C connected 441,000 new prepaid subscribers and managed to win another 62,000 contract customers.

Overall, however, the company lost 0,3% of its market share among prepaid users, mainly because Vodacom made far more headway in pushing up its South African customer base.

Cell C has been profitable at the operating level since May last year, although it has not yet managed to report a net profit after four years. Its rise in revenue was mainly attributed to a larger subscriber base and to an increase in the amount of time that subscribers spent on their cellphones.

Business Day