Vodacom Group reportedly entered talks to acquire the bulk of debt-ridden rival Cell C’s post-paid customer base, a move Bloomberg reported would bolster Vodacom’s leading position in South Africa.
Sources told Bloomberg around 1 million customers could be acquired, which is almost Cell C’s entire monthly base, but talks are at an early stage. The operator’s most recent annual report showed it had 1.1 million post-paid users at end-May 2019.
Cell C is struggling with a ZAR9 billion ($624 million) debt and had been exploring opportunities to reduce this. The sale of part of its subscriber base would not only attract a lump sum, but also shift costs from servicing customers. Job cuts and store closures have also been considered, said the sources.
The operator’s contract subscribers generated revenue of ZAR3.63 billion in the 12 months to end-May 2019, up 6 per cent year-on-year.
In November 2019, rival Telkom South Africa re-emerged as a contender to acquire Cell C, a move Bloomberg stated would have combined South Africa’s third- and fourth-largest operators.
China Mobile was also reportedly in talks, while MTN South Africa expressed interest and warned South Africa’s economy could be damaged if Cell C failed.
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