Blue Label has revealed its financial results for the year ended 31 May 2017, detailing its plans following its recent deals with Cell C and 3G Mobile.
It said the deal to acquire 45% of Cell C and recapitalise the company was one of the most complex restructures South Africa has ever seen.
“[Buying a stake in Cell C] was not only about saving jobs, and saving creditors and the massive infrastructure that Cell C has,” said Blue Label joint-CEO Brett Levy.
“This is about having a strong third network, a strong South African operator.”
Before the acquisition, Cell C was majority-owned by an overseas shareholder. Now, it is 80% locally held – with the aim to eventually be completely South African-owned.
Levy also highlighted their recent acquisition of 3G Mobile, and outlined Blue Label’s handset strategy going forward.
Through the acquisition, Blue Label now has a complete hardware business under one roof, he said.
Levy said that mobile handsets are divided into four tiers:
- Tier 1 devices – brands like Samsung and Apple.
- Tier 2 devices – upcoming brands such as Huawei.
- Tier 3 – household brands that are bringing phones to market.
- Tier 4 – refurbished first-tier devices.
Not only does 3G Mobile distribute devices across all four tiers, it also offers handset financing for post-paid services.
Blue Label also has existing distribution relationships with tier 3 brands like Boost, Verssed, and Blaupunkt, and has an existing tier 4 bolt-on called ReWare – which sources, refurbishes, and distributes second-hand smartphones.
ReWare currently has outlets in Sandton and Braamfontein.
Levy said that the distribution of refurbished devices is a rapidly-growing market.
Blue Label previously told MyBroadband that another area it sees room to grow is handset financing.
Levy said around 20 million handsets are sold in South Africa each year, and he believes there is a “massive opportunity in financing lower and top-end” devices.
“The networks aren’t gung-ho on the finance side of it. They want the handset out and the SIM card – to add on their own finance is really not something they’re after,” he said.