Unlisted mobile services provider Cell C on Wednesday reported a 23% rise in net profits to R199,3-million for the six months ended June. This was achieved on the back of a 22,5% growth in total revenue to R3-billion for the half-year.
The group now has 2,7-million active subscribers — up 7% from 2005 — and 1,9-million prepaid subscribers.
The annual average revenue per user rose from R142 in 2005 to R152.
Jeffrey Hedberg, new Cell C CEO, commented: “While certain key performance indicators reflect that we are moving in the right direction, I am not pleased with our performance over the first six months of 2006.
“As the third licensed operator, we need to substantially improve our focus, speed and efficiency to grow profitably within an industry structure dominated by the incumbents who continue to take advantage of an imprecise regulatory framework.
“This competitive intensity, coupled with a lack of execution on our part, has resulted in the subsequent decision by a number of rating agencies to downgrade our high-yield bonds. In response to these challenges, we are repositioning the company and, if accorded a level playing field with our competition, there is great potential for our company.
“The board and I are convinced that we will surely turn this business around.”
Hedberg said Cell C’s network now covers 70% of the country’s population and 28,5% of the geographical land area — well ahead of the 2007 licence requirement of 60% and 8% respectively.
“In addition, Cell C’s domestic roaming agreement is ongoing, effectively giving its subscribers two world-class networks to use at any one time. This effectively allows us to offer subscribers both extensive geographical coverage and double the urban radio network capacity of other network operators.
“It is on the strength and superiority of this network that Virgin Mobile partnered with Cell C to set up of its virtual network operations in South Africa two months ago.” — I-Net Bridge