Cell C explains why it must transfer control of its crown jewels to its biggest shareholder
Cell C has explained that it is transferring control of its network operating licences and radio frequency spectrum to its largest shareholder to comply with regulations.
“As part of the governance process already initiated by The Prepaid Company (TPC) to increase its shareholding in Cell C, there are regulatory requirements that TPC must fulfil,” Cell C told MyBroadband in a statement.
Cell C’s explanation comes after the Independent Communications Authority of South Africa (Icasa) gave notice of Cell C’s application via Government Gazette on Wednesday.
According to the notice, Cell C has applied to transfer control of its Individual Electronic Communications Service (I-ECS), Individual Electronic Communications Network Service (I-ECNS), and spectrum licences to TPC.
An I-ECNS licence permits companies to build, operate, and sell wholesale access to physical network infrastructure.
I-ECS licences let companies like Cell C sell telecommunications services directly to end-users.
The spectrum licences Cell C applied to be transferred are its 2100MHz, 900MHz, and 1800MHz assignments. This is all of Cell C’s premium raw wireless network capacity.
The Prepaid Company is a subsidiary of Blue Label Telecoms and Cell C’s largest shareholder.
According to its latest financial results, Blue Label owns a combined 63.19% financial stake in Cell C through TPC and special purpose vehicles.
Cell C explained that TPC was increasing its non-controlling 49.5% shareholding to a majority stake of 53.5%, which triggers certain governance requirements.
“This entails a filing with the Competition Commission and Icasa for the approval of the transfer of control to enable TPC to obtain majority control of shares of Cell C by obtaining an additional 4.04% shareholding,” it stated.
“Cell C retains full control of its spectrum as part of its operating model and will continue to operate as a licensee providing mobile services to its customer base as a mobile network operator,” it assured.
“This application is a fulfilment of a governance process necessary in the regulatory framework, which will be publicly announced as soon as the Competition Commission and Icasa have approved the application for transfer of control of the business.”
Pictured: Jorge Mendes, Cell C CEO.
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