Blue Label Group Reveals Cell C Made R832m Loss in 5 Months
- Blue Label revealed that between June 2021 and November 2021, Cell C recorded a loss of more than R832 million after-tax
- The loss was a dramatic blow after the over R1.2 billion profit Cell C made during the same period the previous year.
- Cell C is currently undergoing a multi-year restructuring as a result of its increasing financial woes
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JOHANNESBURG - Blue Label, which owns a 45% stake in Cell C, revealed that between June 2021 and November 2021, the mobile network operator recorded a loss of more than R832 million after tax.
The loss was a dramatic blow after the over R1.2 billion profit Cell C made during the same period the previous year.
According to a report by Blue Label, a part of the blame could be attributed to Cell C’s revenue declining from R7.12 billion for the six months in 2020 to roughly R6.68 billion in 2021.
Source: Twitter
Cell C's financial woes
Cell C is currently undertaking a multi-year restructuring as a result of its rising financial woes. The company has defaulted on debt repayments and made billions in losses in the last couple of years, MyBroadband reports.
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The restructuring process includes the complete shutdown of its own physical radio network infrastructure and moving its customers to roaming on MTN and Vodacom’s networks.
Richard Cheesman, a senior investment analyst for Protea Capital Management, said that if Cell C’s restructuring were successful without considerable losses to investors, it would be a great achievement.
Reactions to Cell C's loss
@Forill89 said:
"Sadly the ISP game is intense. They make massive losses to lock clients and then build revenue in the long run. It is a very competitive business."
@ChristopherMO__ remarked:
"Being a shareholder must suck."
@lerato_akim shared:
"Let's face it. Their marketing team lacks creativity."
@ChiefLuto said:
"I still don't understand why Cell C management rejected Telkom offer to buy Cell C, the Telkom offer was much better than what they got from Blue Label."
@exollany believes:
"The problem with Telecoms is that they always take the big bang approach."
Telkom customers caught off guard as call rates increase by 18.5% with 1 week's notice
Speaking of phone companies, Briefly News previously reported that Telkom customers would have to pay more because the company plans to increase the wholesale transit rate for UK Mobile Vodafone from R0.301 to R56.119. The increase of 18.544% will come into effect from 28 December 2021.
Telkom customers were bamboozled by the company, which only notified them about the increasing rates seven days before the change was supposed to come into effect.
Telkom is no stranger to making such announcements; in fact, one telecommunications executive stated that Telkom likes catching wholesale clients off guard while they are on leave.
Source: Briefly News
