Cell C puts assets up for sale as losses deepen

South Africa’s third-biggest mobile operator has put core parts of the business up for sale as it struggles with R9-billion of debt and deepening losses.

Cell C’s fibre-optic network and base of billed customers are 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 spokeswoman said by e-mail.

The dominance of Vodacom and MTN 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 last month.

Spectrum

South African operators are increasingly 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 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% this year, and the group is now valued at R2.6-billion rand.  — Reported with assistance from Myriam Balezou, (c) 2019 Bloomberg LP