Blue Label gets approval to take control of Cell C 

April 2, 2024
2 min read
Cell C building
  • The South African Competition Commission has approved Blue Label Telecom's request to take control of mobile operator Cell C.
  • The commission's recommendation to the competition tribunal states that this merger is "subject to conditions to mitigate information exchange concerns, and conditions ensuring the continued use of certain prepaid airtime distribution channels for a period, post-merger." 
  • Blue Label currently holds a non-controlling 49.5% stake in Cell C and intends to increase its ownership by acquiring an additional 4.04% stake, bringing its total ownership to 53.5%. 

The company has also submitted an application to the communications regulator (ICASA) through the prepaid company for approval to transfer Cell C’s spectrum licences to TPC.

Meanwhile, CellSAf, a minority shareholder, disagreed with the foregoing. It filed a formal objection to the transfer of licence control in January 2024, claiming that Blue Label's 54% ownership of Cell C does not give it complete control over its licences.

Cell C explains that while Blue Label Telecoms owns a significant share of the company and the majority of its debt, it has no control or influence over Cell C's management.

Besides, Blue Label's voting power is limited to 49.53% until it receives approval from both Icasa and the Competition Tribunal to acquire a controlling stake.

In December 2023, a report said that Blue Label Telecoms, through its subsidiary The Prepaid Company (TPC), formally made the move to acquire control of Cell C.

Subsequently, TechPoint Africa reported in February 2024 that Blue Label Telecoms plans to assume control of Cell C in six months with the necessary approval from the regulators. 

The telco has been consistently funding Cell C through its subsidiary, The Prepaid Company. In a cover letter signed by the regulatory executive head, Themba Phiri, Cell C revealed that the telco injected funding of R5.5 billion into its company, settled creditors’ claims, and granted it an R1.03 billion loan.  

Amidst the acquisition talks, Cell C disclosed in January that it is considering downsizing its workforce by 40% as a measure to reduce cost and enhance flexibility. 

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