• Cell C is still in an "informal" debt standstill, it said on Tuesday, while it prioritises recapitalisation.
  • In the first half of 2020 it lost 28% of its mobile subscribers.
  • It characterises that as "right sizing" its customer base, and says it is on track.
  • For more stories go to www.BusinessInsider.co.za.


It is currently in an informal debt standstill, with "current terms on hold while debt is restructured as part of recapitalisation", Cell C said in a presentation to investors on Tuesday, after defaulting at the end of 2019.

At the same time it is shedding customers, fast. In the first half of 2020, it lost 28% of its combined subscriber base, and 35% of its prepaid users.

But it is "on track", the company said, and quite happy with what it has characterised as the deliberate "right sizing" and a "rationalisation" of its customer base, and may even participate in a planned auction of high-demand frequency spectrum that is critical to delivering high-bandwidth data services – "under the right conditions".

Cell C's strategy is to "rationalise its subscriber base and retain profitable customers", it said, instead of counting SIM cards, and that has seen it increase average revenue per user and gross margins. Despite the plummet in subscribers – and a net loss of R7.6 billion, an average loss of well over R1 billion per month – its total revenues were down only 8% compared to the first half of 2019.

That was in part, Cell C said, because its focus on profitable subscribers rather than growth saw a 27% increase in its average revenue per user (ARPU) in its prepaid base.

At R66, that Cell C prepaid ARPU is now exactly equal to the last number reported by the furiously-growing Telkom for its prepaid mobile base. It is also well below the nearly R80 MTN most recently reported in SA, and not much above the R64 reported by Vodacom.

Cell C said its principal short-term debt now stand at R9.7 billion, with total liabilities standing at R23.2 billion, while its assets are worth R7.7 billion.

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