Companies go public all the time—sometimes to raise cash, sometimes for more technical or strategic motives. For Cell C, South Africa’s fourth-largest telecom operator, the incentive is more structural.
On May 16, its parent company, Blue Label Telecoms, announced that it is considering listing Cell C on the Johannesburg Stock Exchange (JSE) as part of a sweeping restructuring.
The plan centres on converting Cell C’s debt into equity, reducing its financial burden while increasing Blue Label’s stake (Blue Label would offer up the debt Cell C owes in exchange for getting equity.) It also involves transferring airtime assets and bringing Cell C’s postpaid business fully in-house. Blue Label says this move will make Cell C stronger, more independent, and ready for life as a standalone public company.
In 2017, 9mobile, a Nigerian telecom firm, once attempted a debt-to-equity swap with creditors (banks) but failed.
For Cell C, the stakes are high. It has spent years battling financial woes, from technical insolvency to major asset write-downs. It recently pivoted to a leaner, asset-light model instead of owning its telecom infrastructure. In 2023, Cell C started leasing infrastructure from competitor MTN in a bid to drive down costs, and so far, this has worked. The company’s finances steadied again after major revenue climbs last year, and in the half-year period ending November 2024, it was profitable again. Cell C has not been consistently profitable since 2021.
Going public could put Cell C under new pressure to maintain order in its house. Yet, for the JSE, a Cell C listing would be a win. Despite solid financials, the exchange has struggled with more companies leaving than joining. In 2023, 11 companies delisted from the JSE. And by March 2024, two more companies had already exited the bourse. Cell C’s debut could signal that South Africa’s capital markets are open for new business.
The JSE currently lists six telecom companies, including the top three players: MTN, Vodacom, and Telkom. While Cell C still trails far behind its competitors, a listing could increase its visibility and familiarity with retail investors as well as raise capital. With its newfound efficiency, the telecom company could get a real shot at the top three.
