Cell C, South Africa’s unlisted third cellphone operator, has posted a 54% rise in its earnings before interest, tax, depreciation and amortisation (Ebitda) to R134,5-million in the third quarter of its financial year to the end of September 2005 versus R87,7-million in the second quarter of the year, the group said on Tuesday.
Total revenue for the quarter came in at R1,422-billion, a 35% increase from R1,05-billion a year earlier, while the group’s market share in terms of revenue rose by 13,8% year-on-year, it reported, to 9,9% for the six months to the end of September from 8,7% a year earlier.
The revenue increase was primarily attributable to a larger subscriber base, increase in airtime and access revenue, and an increase in interconnection revenue.
Cell C finished the quarter with an active base of close to 2,7-million subscribers, consisting of 2,1-million pre-paid subscribers, 610 000 post-paid subscribers and more than 28 000 community-service telephones (CSTs), it said. During the third quarter it had connected 441 000 pre-paid subscribers, 62 000 post-paid subscribers and more than 28 000 CSTs.
The group conceded 0,3% pre-paid market share but gained 0,5% post-paid market share during the quarter, with the improved market share a result of having achieved a 22% share of net additions. Post-paid accounts now account for close to 23% of the Cell C subscriber base.
Cell C’s average revenue per unit across all subscribers improved to approximately R153 from R142 a year earlier, it said.
Talaat Laham, chairperson and CEO, welcomed the results, stating: “Cell C has succeeded in bringing significant competition to the South African market. This can be seen in our excellent year-on-year growth, with strong improvements in subscriber numbers, revenue and operating profit. We are pleased to be celebrating our fourth birthday as a strong market challenger with over 2,7-million current customers.”
Muhieddine Ghalayini, chief financial officer of Cell C, added: “Cell C’s strong year-on-year and quarterly top-line and Ebitda growth are indicative of our solid business fundamentals and the extent of the market opportunity.
“With Cell C gearing up to offer even better levels of service and a continued strong market outlook in the build-up to mobile number portability, we look forward to continued strong sales translating into further growth.”
They added that discussions with the United Kingdom-based Virgin Mobile to form a joint-venture service provider in South Africa under the Virgin Mobile brand are “progressing well” and they expect to be able to make an announcement on the project before the end of the year.
More than 80% of Cell C traffic is carried on the company’s own network, which now covers 63% of South Africa’s population and 8,7% of the geographical land area, well ahead of its 2007 licence requirements of 60% and 8%, respectively.
The group is also performing well on its licence obligation to roll out 52 000 CSTs to under-serviced areas by 2008, having installed more than 28 000 already, it said.
Cell C is also looking forward to the introduction of mobile number portability at the end of June 2006, which it believed would benefit consumers and remove a significant barrier to competition, it noted.
During the quarter, Cell C finalised its R500-million three-year revolving credit facility with Nedbank, which will be used to fund future capital spending, working capital and to meet its debt service obligations, the group concluded.
Cell C’s majority shareholder is Oger Telecom, a subsidiary of Saudi Oger. — I-Net Bridge