Cell C wants debt extension

very interesting, but honestly the MNOs are the creators of their own misery on this front. Yesterday CellC unveiled a further move in a price war chess game which is a very confident move when you need to have extensions placed on senior debt BUT it also indicates a plan to be in for the long haul. So now the CTR battle gets even more interesting.

And I will say it again, Vodacom and MTN seriously cocked up with their litigation strategy and have embarked on a course that will only perpetually damage the underlying value of their respective companies. They need to be far more forward looking in their approach to CTRs in a world were call terminations are becoming less relevant.
 
Paul Hjul said:
They can be ....

But there is a survival vs sustainability conflict at play - which is abnormal to say the least.
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Don't they have 11m subscribers surely it's possible to be profitable at that customer base if they're active subs. But I think they can not make money at 50c a minute
 
R13... said:
Don't they have 11m subscribers surely it's possible to be profitable at that customer base if they're active subs. But I think they can not make money at 50c a minute
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as I see it their biggest problem is that their subscriber base isn't matched by a high ARPU, they would be able to survive with fewer subscribers on a higher RPU

The challenge for CellC is convincing subscribers to use their network both to make and receive calls especially with MTN appearing hell bent to actually keep them out of the market.

CellC will make money at 50c per minute if there is heavy asymmetry in the CTRs in favour of small mobile operators - every call minute to a Telkom fixed line earns them 40c in revenue and every call to VC or MTN brings them 30c revenue. Increasing the number of subscribers using their lines increases calls both out and in - so they are able to benefit on the incoming revenue from other providers and have a nice margin on outgoing calls.

Now creating a culture of depending on the regulator doing favours is a massive problem - but then isn't Vodacom doing exactly the same thing in not wishing to keep Neotel as a going concern in the acquisition - take a look at the Radio Frequency Spectrum Regulations reg 10 - and what Telkom are doing by failing to provide facilities leasing (and thereby unbundle the local loop), and what MWEB demanded (and at this stage have got) in the form of a market review to implement a regulator heavy form of LLU. Isn't this culture part of having the presidents daughter jettisoned into a bizarrely divided ministry structure as the Chief of Staff?

Which brings me back to my constant refrain - the BAUT need to rethink their strategy on "dealing" with CellC
 
it should be noted that rolling bonds is not an unusual practice in itself.
 
Cell C bondholders agree to debt restructuring
2014-08-10 20:21 - Reuters

Johannesburg - Bondholders of Cell C have unanimously agreed to a R2.3bn debt restructuring, the company said, allowing it to free up cash for network expansion.

Cell C, South Africa's third-largest mobile carrier, is fighting to take market share from giants Vodacom Group and MTN Group and has embarked on an aggressive pricing strategy to win new customers.

The company last month asked bondholders for permission to delay repayment of €77.4m of senior notes due in July 2015 for three years, after earlier reaching a similar agreement with top shareholder Saudi Oger over €82.7m worth of debt.

Cell C said in a statement late on Friday that all of the bondholders have agreed to allow it to push back the maturity on the debt until 2018.

Cell C's chief financial officer told Reuters last month the company is looking to spend R2.3bn on its network this year and a similar amount next year.
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http://www.fin24.com/Tech/Companies/Cell-C-bondholders-agree-to-debt-restructuring-20140810
 
Cell C needs more customers in order for them to hit scale,
 
How much financial sence does it make to delay paying over €150m, by 3 years and paying interest on that (most likely), claiming that they wanna spend less than €2m this year and again the next.

They should rather have requested that the debt be part paid and part postponed.
 
R13... said:
Don't they have 11m subscribers surely it's possible to be profitable at that customer base if they're active subs. But I think they can not make money at 50c a minute
Click to expand...

18m subscribers

Cell C also reported Year-on-Year service revenue growth of 10.5% for Quarter 2 2014 driven by reported subscriber growth of 59% to 18.1m at 30 June 2014.
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