Cell C is facing a challenging future, with reports that it has put core parts of the business up for sale as it struggles with R9 billion of debt and deepening losses.
Bloomberg reported that Cell C is considering offloading its fibre network and base of billed customers.
It added that Cell C is also in talks to sell access to some of its wireless frequencies to larger rival MTN as a part of a bigger network deal.
MTN, Vodacom, and Telkom are reportedly interested in some of Cell C’s assets, and there are also talks that Telkom is looking to acquire the mobile operator.
Telkom and Cell C are, however, not commenting on the speculation that they are in discussions regarding a potential deal.
Bad investment for Blue Label Telecoms
Blue Label Telecoms co-CEO Brett Levy said the company’s investment into Cell C was a bad move for the group.
Despite drawing a line in the sand by writing off Blue Label’s entire investment in Cell C to zero, Levy remains upbeat about the mobile operator’s prospects.
Speaking to CNBC Africa, Levy is confident that Cell C can turn its fortunes around as it hunts for a new equity partner.
Levy said that it was always part of the plan to engage in a second recapitalisation of Cell C through an equity partner or via a listing on the stock markets.
He said that the recapitalisation plans would address Cell C’s debt and losses, and that it is close to sealing the deal with a network partner which will set it on the right path.
Levy, however, dismissed a report that the company was in discussions with China Mobile.
“If China Mobile is shopping around, it definitely isn’t something that has come to us as the main shareholder yet,” he said.
“There is a lot of interest in Cell C – a lot more than people think – but China Mobile specifically? No, that hasn’t come to the shareholders.”
Cell C confident of a turnaround
Cell C told MyBroadband that it believes that with a targeted business strategy and well-capitalised balance sheet, it will lead to better leverage of its assets.
“These assets include valuable spectrum, our active customer base of almost 16-million customers, a distribution channel of 240 stores and a strong brand,” Cell C said.
The company said speculation in the market about Cell C selling its assets is unfortunate.
Cell C added that its turnaround strategy includes operational rationalisation, liquidity, improved network strategy, and recapitalisation.
“The new management team will review opportunities with a view to the long-term viability and sustainability of the business and in-line with its turnaround strategy,” Cell C said.