Big threat to Cell C
Cell C’s subscriber growth is coming almost entirely from its mobile virtual network operator (MVNO) partners, specifically Capitec Connect, data from a recent presentation about the business shows.
The company prepared a presentation as a follow-up to majority owner Blue Label’s recent annual financial results, where it disclosed further details about a possible listing of Cell C.
Although Cell C is starting to show some signs of a financial turnaround, including reporting its first-ever profits, its subscriber numbers have been stagnant or declining for years.
A chart published as part of its presentation shows that Cell C went from having 10.7 million of its own subscribers in 2022 to 7.6 million in May 2025.
This is even more concerning when considering earlier figures. Ten years ago, Cell C reported having around 20 million subscribers. However, it has undergone significant declines since December 2015.
While Cell C’s subscriber decline stabilised around 6.5 million in August 2023, it hasn’t shown much growth in its prepaid subscriber base since then.
Its postpaid subscriber base has continued declining, from around 1 million customers in 2022 to 800,000 by the end of May 2025.
It should be noted that Cell C’s figures for its prepaid and postpaid base include enterprise and fibre-to-the-home customers.
When including its MVNO customers, Cell C’s subscriber base has been growing since August 2023.
One of the most significant contributors to this growth has been Capitec Connect, which launched in September 2022 and reported having 1.6 million active SIMs by February 2025.
While the phenomenal growth of MVNO partners like Capitec Connect is good news for Cell C, it is a double-edged sword.
Cell C faces increasing competition from much larger players like MTN and Vodacom in the MVNO space, with Telkom also entering the ring soon.
Part of the reason for MTN and Vodacom encroaching on Cell C’s turf is that their new radio frequency spectrum licences from sector regulator Icasa require them to.
This has resulted in Cell C losing MVNO partners like Standard Bank and losing exclusivity with First National Bank. FNB Connect had been one of Cell C’s most successful partnerships.
MVNO growth set to continue
According to BMIT’s SA MVNO Report, MVNO subscribers had doubled from 2.5 million in 2022 to nearly five million by 2024. The figure is expected to grow to between 11 million and 12 million by 2029.
Cell C was the first to roll out an MVNO platform in South Africa in 2006, paving the way for the rollout of operators like FNB Connect, Virgin Mobile, and Trace Mobile.
The market has exploded with many more players in recent years, following the launch of MTN’s fully-fledged MVNO platform in 2020.
By 2023, the mobile network had signed up 30 MVNO partners. While some were brand new, others moved over from Cell C.
Cell C CEO Jorge Mendes has doubled down on a strategy to become the go-to destination for companies looking to diversify into MVNO services.
“We want to make sure that we are the home of MVNOs. So we are effectively the network of networks,” Mendes said.
“We’d like to be the first choice for an MVNO partnership to personalise these deals.”
Mendes explained that, in essence, this will result in Cell C becoming an aggregation player aggregating mobile traffic through various MVNOs.
When asked about the profitability of MVNOs relative to Cell C’s direct subscriber base, Mendes said there was no major difference.
He said the MVNO business operates with a similar profit margin and, in some cases, greater than its direct-to-consumer business.
Mendes believes Cell C has an edge over some of its larger competitors, which are unwilling to squeeze their margins to engage with specific market segments through MVNO partnerships.
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