MTN recorded revenue of R1.41 billion from Cell C in the first six months of this year, but Cell C is still missing some payments.
MTN released its financial results for the six months ended 30 June 2021, which revealed that MTN South Africa’s wholesale revenue increased by 62.4%.
A notable improvement in payments supported the increased wholesale revenue from Cell C for roaming on MTN’s network.
The wholesale revenue resulted from a roaming agreement between MTN and Cell C which became effective on 1 May 2020.
MTN said it progressed well on the phase two transition of the roaming agreement, with approximately 35% of Cell C’s traffic now on MTN’s network.
The agreement envisages a three-year transition towards a full national roaming arrangement under which MTN will carry all of Cell C’s network traffic.
While the technical migration of Cell C’s traffic onto MTN’s network is progressing well, the financial side is a different story.
Cell C missed payments for roaming, and in February 2021, it entered into a settlement agreement specifying the repayment schedule for the long outstanding amounts.
MTN said that since the settlement agreement’s effective dates, Cell C has made some but not all the scheduled payments.
Based on Cell C’s liquidity issues, MTN said it is not probable that it will receive all the money to which it is entitled from Cell C under the agreement.
“As of 30 June 2021, R326 million of revenue in relation to satisfied performance obligations remains unrecognised,” MTN said.
Even without getting all the money it was owed by Cell C, MTN still received R1.41 billion from Cell C during the first six months of 2021. This is up from R788 million in the first six months of 2020.
MTN said Cell C continues to work on its recapitalisation programme, which, if successful, would result in a change in its accounting treatment of Cell C roaming revenues.