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Cell C grows revenue, subscriber base

Cell C today announced that it had continued to enjoy good growth in 2010, increasing both revenue and customer numbers.

Cell C increased its customer base by 12% year-on-year to 8.2 million customers. Prepaid growth proved significant for the company, which increased its prepaid subscribers by 17% during the period.

Blended average revenue per user (ARPU) also showed strong growth, increasing by 6% year-on-year.

The rise in the customer base was reflected in Cell C’s market share, which increased to 15.4%. Customer churn decreased by 14% year-on-year.

In the 11 months since Cell C launched its data network, it has had an overwhelming response.

Non-executive chairman and acting CEO of Cell C Simon Duffy said: “Between August last year and June 2011, Cell C grew its data subscriber base to 120 000 customers.”

Financial performance

On the back of the company’s customer growth, revenue increased by 5% year-on-year to R10.2 billion.

The company reported an increase of 4% in service revenue to R9.3 billion in 2010, while Earnings before Interest, Tax, Depreciation and Amortisation (EBITDA) remained unchanged at R1.4 billion, due largely to costs relating to the increased infrastructure and rebranding activities.

“As the Board, we are pleased with the performance and progress that Cell C has made over the last year,” said Duffy.

Corporate finance activities

In June this year, Cell C issued a tender for all of its US$270 million Subordinated Bonds and despite offering a significant premium of 3.125%, only 40% (US$109 million) of bondholders decided to tender their notes. This reflects their continued confidence in the company.

Following the bond tender, credit ratings agency, Standard & Poor’s put Cell C on a positive outlook.

Cell C has also acquired a US$360 million facility from China Development Bank to finance 100% of ZTE’s network rollout.

American Tower Corporation is to acquire 1 365 existing sites (of which 1 288 have already been transferred), for which Cell C will receive US$200 million with an option to transfer up to 1 800 more sites. 

Cell C’s HSPA+ footprint on the increase

Cell C now has 15 major cities and their surrounding areas live on its HSPA+ 900 network, which translates to approximately 63% population coverage. If Cell C had rolled out the network at the traditional 2 100MHz: coverage would have been half of that, at best.

In the next 12 weeks, Cell C expects to launch its network in a number of municipalities across South Africa, including, Paarl, Wellington and Kroonstad.

With plummeting prices of smart devices and tablets, combined with the growth of content providers like Google, South Africa’s demand for mobile broadband is expected to grow by 83% year-on-year by 2015.

In anticipation of this expected demand boom Cell C is increasing the capacity on its network by adding 42Mbps capable sites. Already, Port Elizabeth is live with the increased speeds and Cape Town is being upgraded. Other cities and towns across SA will be upgraded when the demand grows.

Rebranding campaign

Cell C’s revitalisation and rebranding strategy is on track and the company has seen significant growth in brand consideration across the socio-economic spectrum.

Overall brand consideration has increased by 5% year-on-year, with trust in the brand up to 60% in the upper living standards measures (LSM).

The improvements have been boosted by new product offerings, the rollout of the network and a better experience in Cell C stores.

Coupled with the launch of the new network last year, Cell C launched its first Blackberry products, which has proved particularly popular with customers. By June, Cell C hosted 100 000 Blackberry devices on the network.

In June, Cell C launched its All in One voucher targeted at lower income subscribers. It allows prepaid and Control Chat subscribers to recharge with voice, SMS and data from a single prepaid voucher at a great price. Cell C sold about 20 000 of these vouchers in its first month.

“We are half way through the revitalisation programme. We will continue to drive it forward and to keep Cell C top-of-mind for customers. The Board remains committed to the transformation strategy put in place last year,” said Duffy.




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