Cell C has published its first-half financial results to June 30, revealing a decline in data customers as competition intensifies in the South African market.
The operator reported that data subscribers dropped by 4% to 12.1 million in the six-months to June versus 12.6 million in the same period in 2017.
The mobile phone operator also stunned the market by attracting fewer mobile subscribers, renewing concerns that the operator is struggling to compete against rivals – Vodacom and MTN.
Cell C added 600, 000 new mobile subscribers, which pushed its total customers to 16.3 million in the six months to end-June, reflecting a 4% rise from the 15.7 million in the same period in 2017.
The figures were revealed by Blue Label Telecoms, which is a majority shareholder in Cell C.
The company also disclosed that Cell C’s voice revenue decreased by 6% year-on-year in line with a decrease in voice traffic by 10% year-on-year. This might have been affected by the effective price of outgoing voice per
minute, which increased by 3%.
Despite failure to attract more data customers, Cell C managed to increase data revenue by 20% to R2.9 billion.
Furthermore, its Mobile Virtual Network Operator (MVNO) was a start performer increasing subscribers on its platform by 31% to 1.7 million.
The company also increased the number of smartphones on its network by 11% to 9 million.
The mobile phone operator also managed to increase its total revenue by 5% to R7.7 billion.
“Following the measures put in place as part of our turnaround strategy, we are seeing both a satisfactory financial performance to date and increased value offering for our customers. We have focused our efforts on innovation and improving our network coverage and quality
Despite difficult economic conditions, Cell C has managed to grow its total active subscriber base by 600 000 customers to 16.3 million, resulting in total revenue increasing to R7.8 billion from R7.4 billion the previous year. Service revenue increased 11%, from R6.2 billion to R6.9 billion. EBITDA increased 16% to R2.4 billion.
What was more surprising was that Cell C’s net loss improved by 33% to R645 million.
Foreign exchange and financial instrument exposure contributed to the net loss.
Operationally, Cell C said it is also on track to improve both its network coverage and quality through a build and buy strategy.
“Earlier this year we concluded a far-reaching roaming agreement with MTN to complement our own high quality network. The agreement provides our customers with wider 3G and 4G coverage, as well as automatic and seamless roaming access. This means that where a customer is on a call that happens to switch from a Cell C tower to a MTN tower, the call will not be dropped. This agreement allows us to now increase our capital investment during H2 in areas where we’ve chosen to build coverage and capacity,” says Dos Santos.
The rollout of this multi-billion-rand long-term roaming agreement has already begun and areas currently benefiting from this deal include Witbank, Middelburg, Secunda, Ermelo and Standerton. The implementation is expected to conclude by November and as a result, 4G access will increase from 33% population coverage to 80%. The company’s 2G and 3G population coverage is at 99% and 96% respectively.
The Cell C fibre-to-the-home offering C-Fibre, has also seen considerable growth for the period with over 100% in both base and revenue growth.
New C-Fibre connections increased from 3 733 in the same period to 16 425. The offering was launched in 2016 with open access Fibre Network Operators (FNO) and has continued to grow by launching on four new open access networks earlier this year.
During the period, Cell C lost its Tyrone Soondarjee, who resigned.
The company said on Tuesday that the process to appoint new chief financial officer is well underway. In the interim, the Finance portfolio is managed by Robert Pasley (Chief Strategy Officer), responsible for the capital structure of the business, and Douglas Craigie Stevenson (Chief Operations Officer) responsible for operational finance.
Cell C also disclosed that the position of Chief Procurement Officer will not An and the function is now reporting into the Chief Operations
Officer. It also decided not to replace the position of Chief Digital Officer.