09 Aug South Africa: Minister Dlodlo Welcomes Cell C Recapitalisation
Communications Minister Ayanda Dlodlo has welcomed the successful recapitalisation of mobile operator Cell C.
The recapitalisation was made possible by a subscription for shares from Blue Label Telecoms of R5.5 billion and a further subscription from Net1 for R2.0 billion.
According to Cell C, at the close of the transaction, Blue Label Telecoms holds 45% in Cell C, 3C Telecommunications holds 30% (in turn held as 29.4% by the Employee Believe Trust, 45.6% by Oger Telecoms and 25% by broad-based black empowerment grouping CellSAf), Net1 15% and 10% on behalf of Cell C management and staff.
The ownership of the company by South African shareholders has increased from 25% to over 86% and the participation of historically disadvantaged persons in Cell C increases from around 25% to more than 30% at ownership level.
This means that Cell C management and staff now have the opportunity for the first time to participate in the equity of the company.
Minister Dlodlo on Monday said she is pleased that the transaction has significantly increased the South African ownership of Cell C, and further saved an estimated 2 500 direct and 15 000 indirect jobs.
“We recognise that the cost to communicate is too high for the majority of South Africans and government would like to see this reduced significantly, including the cost of data.
“To support the broadening of access to information for all our citizens, it is imperative to intensify competition in the South African telecommunications industry,” the Minister said.
The mobile operator is regulated by the Independent Communications Authority of South Africa and is therefore one of the telecommunications sector’s stakeholders.
Minister Dlodlo said government is committed to working with the private sector and labour towards inclusive growth and the development of the telecommunications sector. “This also reaffirms South Africa as an attractive investment destination.”
She wished Cell C well in its new journey.
Meanwhile, the Department of Telecommunications and Postal Services said on Tuesday that the investment is significant because it saves Cell C and prevents the monopolisation of the telecommunications industry.
This is in line with Government’s policies, such as the National Integrated Policy, that advocate for the opening up the sector to new players, particularly to blacks and small.
“It is when the industry is open and deconcentrated that we, as citizens, may realise the call for Data Must Fall, through effective competition and innovation that also improves the quality of service.
“We call upon Cell C management to prioritise transformation, job creation and join our partnership to ensure that all South Africans are connected to affordable and reliable internet by the end of 2020,” Minister of Telecommunications and Postal Services, Dr Siyabonga Cwele Minister Cwele, said.
South Africa has partnered with the World Economic Forum Africa, the private sector and civil society to connect all citizens to the internet through a programme called the Internet For All.