Cell C said to weigh sale to wireless carriers

Company’s survival is at risk as its two larger competitors seek transactions to strengthen their dominance.

Cell C is exploring options for the third-largest South African wireless carrier including a sale to domestic competitors, according to two people familiar with the matter. 

Cell C, which is majority owned by Dubai-based Oger Telecom, is working with Goldman Sachs Group on the review, said the people, who asked not to be identified because the talks are private.

The wireless provider had about 20 million customers as of last month, according to the company. Market leader Vodacom reported more than 31 million active customers in South Africa as of the end of last year.

Cell C’s survival is at risk as the company’s two larger competitors, Vodacom and MTN seek transactions to strengthen their dominance in Africa’s second-biggest economy, Cell C Chief Executive Officer Jose Dos Santos (pictured) told lawmakers in November. Cell C reduced staff last year after South Africa’s communications regulator scaled back plans to reduce the cost of calling other mobile networks, a proposal aimed at helping smaller carriers.

Vodacom, controlled by Vodafone Group, is seeking antitrust approval to buy Internet provider Neotel to expand its fiber network and wireless capacity, while MTN is in discussions with Telkom SA about an agreement on radio-network access.

Oger Telecom is the telecommunications unit of Saudi Oger, which is the majority owner of Turk Telekomunikasyon AS.

The company is fully committed to Cell C and its growth plans, and has invested $450 million in the business in the last two years, it said in an e-mailed statement today. A spokesman for Goldman Sachs declined to comment.

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