BIG READ | JSE debutant Cell C outlines ambitious growth strategy

Less than a year after its JSE debut, Cell C is betting that being smaller, leaner and less asset-heavy than its rivals will give it an edge in a fiercely competitive telecommunications market, while regulatory reforms pose both risks and opportunities for the industry.

The mobile operator, which completed its listing in November last year, has outlined an ambitious growth strategy centred on prepaid expansion, wholesale services, enterprise offerings and a rapidly growing mobile virtual network operator (MVNO) business.

Speaking after the company’s first full-year results as a listed company, CEO Jorge Mendes said Cell C’s strategy remains unchanged despite its public listing. “We are not changing strategy. It’s a continuation to ensure sustainable growth, scalable returns and long-term value creation,” he said.

Cell C reported revenue of R12.6bn and service revenue of R11.6bn for the year to May, while subscriber numbers increased to 8.9-million. The group expects revenue growth of between 5% and 10% in the coming financial year and is targeting adjusted earnings before interest, taxes, depreciation and amortisation (Ebitda) of about R3bn in 2027.

A key pillar of that growth strategy is the company’s wholesale division, particularly its MVNO ecosystem. Cell C has deliberately positioned itself as the “home of MVNOs”, partnering with retail, banking and consumer brands that use its connectivity platform to sell voice and data under their own brands.

Wholesale revenue grew 20% year-on-year, while MVNO subscribers increased by 1.2-million. Mendes said the opportunity remained far from saturated. Total MVNO numbers stand at 5.7-million. “We’ve got a long way ahead of us still in terms of growth, in terms of subscribers, in terms of product, which translates into revenue, and in terms of new MVNO partners,” he said.

The strategy differentiates Cell C from larger rivals that operate competing financial services, retail marketplaces or banking products. “We are very deliberate about not being a bank. That makes it very interesting for us in this space compared to competitors who want to be both a bank and a telco,” Mendes said.

Cell C intends to remain “network agnostic”, integrating with different network providers and emerging technologies, including satellite connectivity, rather than investing heavily in its own infrastructure, he added.

Cell C roams on Vodacom and MTN for its postpaid and prepaid customers, respectively. It does not have a huge capital investment compared to rivals since it does not own cell towers and other related physical infrastructure that requires billions in investments. It plans to spend about R700m during the 2027 financial year.

Among the major projects in the coming year will be a new postpaid billing platform, further upgrades to digital customer channels, and the revamp of the remaining stores in Cell C’s 103-store footprint.