{"id":594929,"date":"2025-05-16T08:57:09","date_gmt":"2025-05-16T06:57:09","guid":{"rendered":"https:\/\/mybroadband.co.za\/news\/?p=594929"},"modified":"2025-05-16T09:31:07","modified_gmt":"2025-05-16T07:31:07","slug":"huge-deal-for-cell-c","status":"publish","type":"post","link":"https:\/\/mybroadband.co.za\/news\/cellular\/594929-huge-deal-for-cell-c.html","title":{"rendered":"Huge deal for Cell C"},"content":{"rendered":"\n

Cell C’s majority shareholder, Blue Label Telecoms, has announced a restructuring that will allow the mobile operator to retake complete control of its contract subscriber base.<\/p>\n\n\n\n

This comes after Cell C CEO Jorge Mendes told MyBroadband in November 2023 that they wanted to take back control<\/a> of their postpaid services.<\/p>\n\n\n\n

In January 2021, Cell C surprised the market when it revealed that its contract and broadband subscribers would roam on Vodacom’s network<\/a>.<\/p>\n\n\n\n

That’s because Cell C had previously said it would stop operating its own cellular towers and outsource the management of its radio access network (RAN) to MTN as a “virtual RAN”.<\/p>\n\n\n\n

There was widespread speculation that Cell C sold its contract and broadband subscriber base to Vodacom in a secret deal that involved Comm Equipment Company (CEC), a subsidiary of Blue Label.<\/p>\n\n\n\n

Cell C, Blue Label Telecom, and Vodacom vehemently denied that the contract base was sold.<\/p>\n\n\n\n

After months of unanswered questions, Blue Label disclosed<\/a> the existence of “Project Boston”.<\/p>\n\n\n\n

According to Blue Label, Cell C was faced with the decision to either wind down or restructure its postpaid service offering.<\/p>\n\n\n\n

“During the 2021 financial year, the Group, through its subsidiary Comm Equipment Company (CEC), entered into an arrangement with Cell C to facilitate Cell C’s operation of the base,” Blue Label stated.<\/p>\n\n\n\n

The agreement went into effect on 1 November 2020 for an initial five-year period, which CEC could renew for four more years.<\/p>\n\n\n\n

CEC was entitled to receive a share of the subscription income generated by Cell C from a subset of new and upgrading postpaid subscribers who signed up, extended, or upgraded their contracts after 1 November 2020.<\/p>\n\n\n\n

Cell C also paid CEC certain fixed and variable payments.<\/p>\n\n\n\n

“Cell C will remain entitled to the subscription income of existing subscribers at 31 October 2020 for the remainder of the subscribers’ contract and a share of the ongoing revenue of New and Upgrade subscribers,” Blue Label explained.<\/p>\n\n\n\n

“The aim of the reorganisation would be for the base to remain intact and grow in the future, and for Cell C to have limited downside risk on the base.”<\/p>\n\n\n\n

CEC performed certain services itself and subcontracted the balance to a subsidiary of Vodacom.<\/p>\n\n\n\n

“The rationale is to reduce Cell C overheads by leveraging Vodacom scale and expertise,” Blue Label said.<\/p>\n\n\n\n

Project Boston also rewrote the way CEC funds handsets to Cell C subscribers, Blue Label stated.<\/p>\n\n\n\n

“Bad debt risk now sits with CEC,” it explained.<\/p>\n\n\n\n

Restructuring for Cell C to acquire CEC<\/h2>\n\n\n\n
\"\"
Jorge Mendes, Cell C CEO<\/figcaption><\/figure>\n\n\n\n

In an announcement to the JSE News Service on Friday, Blue Label has revealed a plan to restructure its business so Cell C can formally acquire CEC.<\/p>\n\n\n\n

The restructuring also helps pave the way for a potential future listing of Cell C on the JSE, Blue Label said.<\/p>\n\n\n\n

The key components of the proposed deal include:<\/p>\n\n\n\n

    \n
  • Airtime asset transfer:<\/strong> The Prepaid Company (TPC), the wholly owned subsidiary of Blue Label that holds shares and debt claims in Cell C, will transfer Cell C airtime currently held by TPC on its balance sheet to Cell C in exchange for newly issued additional equity in Cell C.<\/li>\n\n\n\n
  • Debt-to-equity conversion:<\/strong> TPC’s outstanding debt claims against Cell C will be capitalised and converted into equity, further reducing Cell C’s leverage.<\/li>\n\n\n\n
  • Acquisition of Comm Equipment Company:<\/strong> Cell C will acquire 100% of CEC from TPC in exchange for additional Cell C shares.<\/li>\n\n\n\n
  • SPV restructure:<\/strong> The Special Purpose Vehicles (SPVs) currently holding equity interests in Cell C will also be restructured as part of the broader initiative, aligning their ownership structures with the redefined capital framework.<\/li>\n<\/ul>\n\n\n\n

    “Overall, the restructure is intended to streamline operations, improve financial sustainability, and enhance Cell C’s strategic readiness for long-term growth and potential listing,” Blue Label stated.<\/p>\n\n\n\n

    “The internalisation will enable Cell C to assume full responsibility over its postpaid customer base, including oversight of supply chain, commercial operations, marketing, billing, credit, and collections.”<\/p>\n","protected":false},"excerpt":{"rendered":"

    Blue Label Telecoms has announced a restructuring that will allow Cell C to retake full control of its contract subscriber base.<\/p>\n","protected":false},"author":15,"featured_media":557941,"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":[14],"tags":[1017,355,68672,83101,41],"class_list":["post-594929","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-cellular","tag-blue-label-telecoms","tag-cell-c","tag-comm-equipment-company-cec","tag-the-prepaid-company-tpc","tag-vodacom"],"_links":{"self":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/594929"}],"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\/15"}],"replies":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/comments?post=594929"}],"version-history":[{"count":5,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/594929\/revisions"}],"predecessor-version":[{"id":594949,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/594929\/revisions\/594949"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/media\/557941"}],"wp:attachment":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/media?parent=594929"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/categories?post=594929"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/tags?post=594929"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}