More Africa NewsNew Cell C boss won’t start a price war

August 29, 2023by myles0

Newly appointed Cell C CEO Jorge Mendes has no intention of starting a price war with his bigger rivals in the telecommunications industry.

Mendes, who was speaking to journalists on Monday for the first time since his appointment, said: “Discounting for the sake of being cheaper is not where we want to be,” he said.

Cell C may have little other option, though. Fresh from its second recapitalisation – led by its largest shareholder, JSE-listed Blue Label Telecoms – management and shareholders will be wary of once again building unsustainable levels of debt on its balance sheet.

“Ours won’t be a pure pricing strategy where we are cheapest in the market,” Mendes said. “We will do things slightly differently.”

He said the company plans to shake up its culture, and that “in 18-24 months’ time, this will be a very different organisation” with a “much bigger valuation”.

“There is still good brand value in Cell C. But we really need to make it a brand that South Africa loves,” Mendes said.

Blue Label, meanwhile, continues to play a relatively hands-off role, despite its 49% shareholding and talk by Blue Label co-CEO Brett Levy of possibly buying control of the mobile operator soon.

Cell C board

Blue Label, which is represented on the board of Cell C by its chief operating officer, James Newman, is scheduled to publish its results for the year to 31 May 2023 later this week where it is likely to provide a snapshot of Cell C’s financial performance. It has already cautioned that the mobile operator will be a drag on its full-year earnings.

On the potential to work with Telkom, which had held talks previously to buy Cell C, Mendes said no discussions are taking place. However, he didn’t rule out the possibility for working with Telkom to compete more effectively with Vodacom and MTN.

“Our view is simple: we need to make ourselves strong, profitable and sustainable. Beyond that, anything is possible. If you take a five-year plan, in year 2 or year 3 you could start looking at those opportunities. There is no conversation happening now, but going forward, who knows?”

Source: Tech Central

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