by Staff Writer
South Africa’s third mobile phone operator Cell C on Tuesday delivered R540 million in net profit for the year ending 31 December 2016.
This is Cell C’s first net profit after struggling for years to deliver one.
The company attributed the net profit to strong subscriber growth. It reported a 20% rise in subscriber growth to 15.3 million customers in the year to end-December versus 12.8 million in the same period in 2015.
Cell C also boosted its EBITDA (earnings before interest, tax, depreciation and amortisation) by 59% to R11.8 billion.
“The strong revenue growth was the result of a focused strategy of innovation, exceptional value in product offerings and a customer-centric approach to how Cell C services its customers,” said Cell C CEO, Jose Dos Santos.
Cell C increased its total revenue by 11% to R14.6 billion and service revenue by 8% to R11.8 billion in 2016.
Service revenue was driven largely by the growth in data volumes, which increased by 67% in the reporting year. Data revenue was up 35% year-on-year to R4.4 billion.
“While we did see a marginal decline in traditional voice traffic, in favour of other voice technologies, this was offset by the massive data growth,” says Dos Santos.
The company said another financial highlight has been the strong growth in its MVNO segment. Wholesale revenue increased 147% year-on-year to R370 million in revenue.
During 2016, Cell C invested approximately R3.4 billion in its network and other fixed and intangible assets, rolling out predominantly LTE and LTE-Advanced. Its total capital expenditure over the last four years amounted to more than R11.6 billion.