Cell C in trouble over ICASA licence

ICASA has said that Cell C did not use the correct legal procedure to notify it of its recent change in shareholding.

Blue Label Telecoms recently became a 45% shareholder in Cell C through its subsidiary The Prepaid Company.

3C Telecommunications holds a 30% stake in Cell C, with 3C comprising the Employee Believe Trust (29.4%), Oger Telecoms (45.6%), and CellSAf (25%).

Net1 has a 15% stake, and the remaining 10% is held on behalf of Cell C management and staff.

The Blue Label deal recapitalised Cell C and reduced its net borrowings to under R6 billion.

ICASA said the notification it received of the recapitalisation was filed in terms of Section 2(1)(c) of Schedules 2 and 3 of the Regulations on Standard Terms and Conditions for Individual Licences, read with Section 14(A)(2)(c) of the Process and Procedure Regulations for Individual Licences.

ICASA said it believes the transaction triggers the provisions of Section 13 of the Electronic Communications Act, and Cell C’s notification to ICASA ought to have been filed as an application for change of control of the licensee.

“The Authority is engaging Cell C to seek clarity on this apparent non-compliance with the legislative provisions,” said ICASA.

ICASA is also taking external legal advice on the matter, including on appropriate enforcement actions.

Cell C responds

Cell C said it is in the process of submitting information to ICASA, and that it is unclear why ICASA said the transaction triggers the provisions of Section 13 of the Electronic Communications Act, without first having heard Cell C’s position.

“Cell C has received extensive legal advice and is comfortable that the recapitalisation does not amount to a transfer of control that would have required approval,” it said.

“The company is of the view that once ICASA has a proper understanding of it, it will be clear that there has not been any transfer of control and that no approval is required.”

Cell C said despite repeated requests to ICASA, the regulator has not given the company any indication why it has taken this view, or what process it is following.

“It is therefore difficult for Cell C to engage with ICASA’s views.”

“Notwithstanding this, Cell C will submit detailed and extensive information to ICASA and welcomes the opportunity to engage further regarding this transaction.”

Now read: Blue Label’s big smartphone plans following Cell C deal

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Cell C in trouble over ICASA licence