South Africa’s communications watchdog – ICASA, has finally broken its silence, confirming its approval of Blue Label Telecoms’ bid to take control of Cell C.

However, the reasons behind the approval of the deal remain shrouded in secrecy, raising questions about transparency and accountability.

On January 24, 2025, Blue Label announced that ICASA had approved the transfer of Cell C’s spectrum and network licenses, clearing the path for the JSE-listed group to assume control of the struggling mobile operator.

Cell C has been transitioning into a super mobile virtual network operator, and Blue Label, which currently holds a 49.5% non-controlling stake, is set to increase its shareholding to 53.57% through its subsidiary, The Prepaid Company (TPC).

TPC will acquire an additional 4.04% of Cell C shares from Cedar Cellular Investment 1 (RF) Ltd (SPV1).

ICASA’s confirmation came only after a Business Day column by Gugu Lourie pressured the regulator to issue a statement.

Published yesterday under the headline GUGU LOURIE: Silence over rulings risks making Icasa irrelevant, the column highlighted the lack of transparency surrounding the approval.

Lourie wrote: “No public notice. No media statement. No explanation – just silence.

“This is not just puzzling, it’s deeply concerning, especially considering that the regulator held public hearings on the matter in September last year.

“Why keep schtum about its ruling on the Cell C licence transfer to Blue Label? What is the regulator hiding?”

Lourie further emphasised ICASA’s role as a public institution, stating: “On paper, Icasa is a critical institution responsible for the issuance of licences, compliance enforcement and management of the radio frequency spectrum.

The regulator’s role is to act in the public interest, not to serve as a private messaging service for corporate entities such as Blue Label.”

In a media statement released today,

ICASA claimed it evaluated the application based on promoting competition in the ICT sector, protecting consumer interests, and ensuring equity ownership by Historically Disadvantaged Persons (HDPs).

Post-transaction, HDP ownership in Cell C will reportedly stand at 34.41%, exceeding the 30% minimum threshold.

The statement said: “The authority has approved the transaction after careful consideration and believes that it will secure Cell C’s continued operation, facilitate financial recovery and strengthen its market position.

“Furthermore, the authority believes that the approved transfer of control applications will not negatively impact competition in the market and will prioritise consumer interests and promote competition in the ICT sector.

“Additionally, the Authority views the proposed transaction to be in the best interest of the public.”

ICASA also revealed that the approval was granted on November 29, 2024, following a “thorough regulatory review process”.

However, the regulator has yet to provide the public with detailed reasons for its decision, stating only that it will publish the “reasons for the Decision in respect of the transfer of control applications in due course”.

This lack of transparency fuels skepticism about ICASA’s commitment to openness and its role as a guardian of public interest in the telecommunications sector.

Until the full rationale is disclosed, the approval of Blue Label’s takeover of Cell C remains a decision cloaked in mystery.

To thrive, Cell C must operate under clear and honest ownership structures, says the writer. Picture: THAPELO MOREBUDI

Is the Independent Communications Authority of South Africa (Icasa) capable of untangling the complex BEE structure established by Cell C to discover the true ownership of the company and its subsidiaries?

I remain unconvinced.

On September 26, 2023, Cell C applied to Icasa to transfer control of its licences, including its radio frequency spectrum, to The Prepaid Company (TPC). TPC, a subsidiary of JSE-listed Blue Label Telecoms, currently holds a 49.53% stake in Cell C and seeks to increase this to 53.5%. This move, however, is fraught with controversy due to concerns over Cell C’s actual BEE credentials and speculation that MTN may be controlling its spectrum.

At a public hearing held this week by Icasa, issues regarding Cell C’s empowerment status were highlighted, with some questioning whether the company meets the requirement of at least 30% ownership by historically disadvantaged individuals.

Duncan Turner, SC, representing Vodacom, presented evidence suggesting that MTN might have assumed control over Cell C’s spectrum, which would necessitate amendments to the application. Turner argued that, without these changes, the application should either be rejected or suspended.

Cell C’s former BEE partner, CellSaf, has seen its direct stake plummet from 40% to just 1%.

Advocate Siyabonga Mahlangu, representing CellSaf, noted: “We didn’t even know until today that it has been reduced to 1%.”

He criticised Cell C’s approach, saying: “Actual empowerment appears to have been replaced with fancy, complicated, sophisticated BEE structures.” Mahlangu urged Icasa to thoroughly investigate the holding structure of Cell C, as CellSaf’s data suggests the company doesn’t meet the 30% black ownership threshold.