Cell C faces an uphill battle: analyst

[Kevin Lancaster]

Cell C faces an uphill battle: analyst

Analysts have raised questions about Blue Label Telecoms’ ability to turn Cell C into a profitable company.

 

[JimM]

MTN and Vodacom will turn Cell C around if they start charging extra for VoIP...

 

[ngwenyas]

Cell C will not grow profit if they remain a charity case (free whatsapp, cheap this, buying out contracts). and their network is at a stand still, majority of their sim cards are used as secondary sims (just in case i dont find coverage on other networks).

 

[Skerminkel]

Cell C will not grow profit if they remain a charity case (free whatsapp, cheap this, buying out contracts). and their network is at a stand still, majority of their sim cards are used as secondary sims (just in case i dont find coverage on other networks).

The "charity case" is all marketing. They are generating a lot of news and consumers like it. They have also seen massive growth over the last few years. If their EBITDA is good, it means they are making money. I assume it already includes the cost of the debt. I cannot see how they can exclude it. If that is the case, the RoI might not be great yet, but a large investor might like the low risk of a large telecoms company over the longer term.

 

[ToxicBunny]

He said Cell C is showing strong growth, and has a good financial position if its debt is taken out of the picture.

You state your debt is in the high teens (in billions), but you can only be in a good financial position if you take the debt out of the picture....

That is something as a major investor, I'd be VERY worried about.

 

[znh]

CellC faces uphill battle trying to signup all the people running from MTN and Vodacom over their hostile stance towards OTT services.

 

[hawker]

They'll gain a lot of users once MTN and Vodacom start charging extra for using data for VOIP over their networks.

 

[Swa]

Cell C will not grow profit if they remain a charity case (free whatsapp, cheap this, buying out contracts). and their network is at a stand still, majority of their sim cards are used as secondary sims (just in case i dont find coverage on other networks).

They are not a charity case. Buying out contracts came with strict conditions to make a profit while luring people away. Whatsapp costs R5. The majority of those secondary sims are in other devices taking chunks away from other operators with things like 3GB for 1 year or Giga100.