Blue Label to take control of Cell C’s telecoms licenses in SA
December 15th 2023
South African operator Cell C has requested to have its telecoms licenses transferred to shareholder Blue Label Telecoms. The Independent Communications Authority of South Africa (ICASA) published a notice in a government gazette last week saying it had received applications from Cell C for the transfer of control of its Individual Electronic Communications Service (I-ECS), Individual Electronic Communications Network Service (I-ECNS) and Radio Frequency Spectrum (RFS) licenses to The Prepaid Company (TPC) which is a subsidiary of Blue Label. ICASA said it will consider whether the proposed transaction would promote competition in the ICT sector under the terms of the country’s Electronic Communications Act (ECA). The transfer application will also be evaluated on whether it would be in the interests of consumers and whether TPC has enough equity ownership by historically disadvantaged persons. In February 2023, Blue Label said it had intentions to take a controlling stake in Cell C so it could have more impact on the operator’s strategy going forward. Blue Label Telecoms Joint-CEO Brett Levy reiterated this plan in an interview with Connecting Africa in August 2023. At the time he wouldn’t give an exact percentage it was aiming to buy but said anything above 51% would do the trick. Currently Blue Label, through TPC, owns a 49.53% stake in Cell C. Levy said Blue Label would need regulatory approval from ICASA and South Africa’s Competition Commission. Blue Label Telecoms’ earnings for the year ended May 31, 2023, were negatively impacted by its investment in Cell C as well as rolling blackouts that plagued South Africa over the past year. Blue Label’s core headline earnings per share (a key profit measure in South Africa) dropped by 62% year-over-year (YoY). Cell C also recently published a trading update for the period to September 2023 saying that its business stabilization efforts were yielding improved results, positioning it to return to growth and enhanced competitiveness in the market.