Strange shift at Cell C
Cell C has denied any change in strategy, despite its latest results showing a surge in prepaid subscribers and a drop in average revenue per user (ARPU).
This comes after Cell C said that previous dramatic declines in its subscriber numbers were all part of a plan to focus on high-value customers.
As recently as August 2025, when it published its results for the year ending 31 May, Cell C said it was deliberately focused on optimising its subscriber base to attract and retain higher-yield customers.
The company now appears to have changed course, spending aggressively on marketing and adding over a million subscribers in the six months since 1 June 2025.
Cell C’s most recent interim results reveal that these were not high-yield customers, as its prepaid ARPU dove by 8.4% since November 2024, from R78 to R71.
According to Cell C, the decrease in ARPU was mainly due to a 14% effective reduction in data tariffs.
The effect on its blended ARPU for its entire subscriber base was even more dramatic, declining from R93 to R84, almost a 9.7% year-on-year decrease.
This is because it also lost 63,000 contract customers. Once again, Cell C has characterised this as a deliberate clean-up of its subscriber base.
It showed that its postpaid ARPU rose from R220 to R230 as lower-value customers exited. However, this is only a 4.5% increase in ARPU.
These figures show an apparent disconnect or change in strategy at Cell C. While simultaneously “cleaning up” its postpaid base, it was also aggressively onboarding low-value prepaid customers at great cost.
Queried about this, Cell C maintained that there had been no change to its strategy. “Customer value remains at the centre of how we grow. Recent performance reflects this approach,” it said.
“Network improvements and value‑led offers have brought more prepaid customers onto the platform, increasing volumes but temporarily softening ARPU as new users typically enter at lower spend levels.”
At the same time, Cell C said the increase in postpaid ARPU following a clean‑up of the subscriber base that removed inactive and low‑value customers was the approach it has consistently communicated.
| Cell C financials | 1H26 | 1H25 | YoY % |
|---|---|---|---|
| Prepaid segment | |||
| Revenue | R2.74 billion | R2.69 billion | +1.6% |
| Subscribers | 7,830,600 | 6,915,200 | +13.2% |
| ARPU | R71 | R78 | -8.4% |
| Postpaid segment | |||
| Revenue | R1.16 billion | R1.14 billion | +2.3% |
| Subscribers | 784,600 | 847,900 | -7.5% |
| ARPU | R230 | R220 | +4.4% |
| Total | |||
| Revenue | R5.68 billion | R5.58 billion | +1.8% |
| Subscribers (direct) | 8,615,200 | 7,763,100 | +11% |
| Subscribers (wholesale HLR) | 5,106,000 | 3,939,000 | +29.6% |
| ARPU (blended) | R84 | R93 | -9.7% |
Cell C has reached a turning point, says CEO
Cell C published its unaudited half-year financial results on 13 February 2026, with CEO Jorge Mendes saying the company had reached a turning point.
“The structural actions we have taken are beginning to translate into operational momentum, improving customer outcomes, and a stronger financial foundation,” he said.
“With a focused strategy and an asset-light model at the core, we are entering the next phase positioned for sustainable growth and long-term stakeholder value.”
Cell C reported that its prepaid business generated revenue of approximately R2.7 billion in a highly competitive market.
“Reported net revenue increased by 1.6% year‑on‑year, driven by the unwinding of historically high airtime discounts.”
Meanwhile, postpaid revenue increased by 2.3% to almost R1.2 billion, despite a 63,000 decline in contract subscribers from November 2024.
Cell C said the growth in prepaid subscribers represented a recovery from the more challenging prior comparative period, supporting its focus on “renewed customer growth and value‑led engagement”.
Total expenses increased by 16.7% year-over-year to R5.77 billion, with operating expenses at R2.05 billion, a 52% year-on-year increase, and direct expenses increasing 3% to R3.72 billion.
“The biggest factors driving the YoY increase in operating expenses were personnel costs, up 13% YoY, IT expenses, up 27% YoY, and advertising and marketing up 22%,” Cell C said.
“The other main contributor to the increase was the transaction costs of R233 million for the IPO (JSE listing) and restructure, together with IFRS 2 costs of R140m. These are a once off expenses.”
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