{"id":197873,"date":"2017-02-08T14:53:38","date_gmt":"2017-02-08T12:53:38","guid":{"rendered":"http:\/\/mybroadband.co.za\/news\/?p=197873"},"modified":"2017-02-08T14:55:10","modified_gmt":"2017-02-08T12:55:10","slug":"cell-c-has-shot-itself-in-the-foot","status":"publish","type":"post","link":"https:\/\/mybroadband.co.za\/news\/cellular\/197873-cell-c-has-shot-itself-in-the-foot.html","title":{"rendered":"Cell C has shot itself in the foot"},"content":{"rendered":"

Ratings firm S&P Global\u00a0recently downgraded<\/strong><\/a> Cell C\u2019s corporate credit rating to the lowest junk-level rating on its scale.<\/p>\n

The downgrade is mainly a result of Cell C missing an interest payment on its senior secured bonds, but S&P Global\u2019s explanation also points to uncertainty regarding the operator\u2019s spectrum assets.<\/p>\n

S&P Global said<\/strong><\/a> Cell C\u2019s revised recovery rating and lower recovery prospects are partly due to uncertainty over a potential buyer’s ability to have unrestricted use of Cell C’s spectrum.<\/p>\n

\u201cFor example, in 2015, the Independent Communications Authority of South Africa placed restrictions on the use of Neotel\u2019s spectrum by Vodacom when it attempted to purchase Neotel,\u201d said S&P Global.<\/p>\n

The uncertainty around spectrum has a direct impact on Cell C\u2019s value in a bankruptcy scenario.<\/p>\n

\u201cUncertainty over which potential buyers could emerge and whether ICASA could restrict spectrum use makes Cell C’s spectrum assets difficult to value,\u201d said S&P Global.<\/p>\n

Vodacom and Neotel must be celebrating this as poetic justice, as Cell C vehemently opposed the use of Neotel\u2019s spectrum by Vodacom if the deal went through.<\/p>\n

Cell C CEO Jose dos Santos said if Vodacom were to acquire Neotel\u2019s fibre network and its mobile spectrum, it would render the company\u2019s iron grip on the market into an unassailable monopoly.<\/p>\n

\u201cVodacom\u2019s takeover of Neotel would have delivered substantial amounts of spectrum to the former, translating into an incredible and unfair advantage that could only hurt the market and ultimately consumers,\u201d said dos Santos.<\/p>\n

Cell C celebrated restrictions<\/strong><\/a> which were placed on Vodacom using Neotel\u2019s spectrum, which ultimately killed the deal<\/strong><\/a>.<\/p>\n

These restrictions, which Cell C fought for, have now come full circle – causing damage to Cell C\u2019s corporate credit rating.<\/p>\n

As a heavily-indebted company, which is in the process of restructuring its debt, a poor credit rating is particularly bad news.<\/p>\n

It means Cell C will have to pay more to borrow money in global markets, which in turn will make it more difficult for the operator to become profitable.<\/p>\n

Cell C\u2019s victory in preventing Vodacom from using Neotel\u2019s spectrum can therefore be seen as an own goal, which is now making the company\u2019s financial future less certain.<\/p>\n

Now read:\u00a0Cell C downgraded to lowest junk rating<\/a><\/h3>\n","protected":false},"excerpt":{"rendered":"

S&P Global recently downgraded Cell C to the lowest junk-level rating, and karma is partly to blame for the mobile operator\u2019s misfortune.<\/p>\n","protected":false},"author":2,"featured_media":185804,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_sma_x_autopost_status":"idle","_sma_x_autopost_error":"","_sma_x_post_id":"","_sma_facebook_post_id":"","_sma_instagram_post_id":"","_sma_threads_post_id":"","_sma_x_attempts":0,"footnotes":""},"categories":[19,14],"tags":[355,35,533,107,39150,4490,41],"class_list":["post-197873","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","category-cellular","tag-cell-c","tag-headline","tag-icasa","tag-neotel","tag-sp-global","tag-spectrum","tag-vodacom"],"_links":{"self":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/197873"}],"collection":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/comments?post=197873"}],"version-history":[{"count":1,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/197873\/revisions"}],"predecessor-version":[{"id":197925,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/197873\/revisions\/197925"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/media\/185804"}],"wp:attachment":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/media?parent=197873"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/categories?post=197873"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/tags?post=197873"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}