South African communications regulator ICASA has approved the transfer of operator Cell C’s spectrum and network licences to Blue Label Telecoms, paving the way, except for one more approval, for the technology company to take control of Cell C.
ICASA and Cell C confirmed late last week that the transfers had been okayed. However, news service TechCentral explains that Cell C will continue to hold its licences post-transaction and will continue to provide the licensed services, despite the transfer of control to Blue Label subsidiary The Prepaid Company (TPC).
As TechCentral explains, the name of the spectrum licence holder (Cell C) will not change, only the names of the shareholders. This also means that from an accounting perspective, the spectrum assets owned by Cell C will continue to sit on Cell C’s books and not those of TPC or Blue Label.
Currently, Blue Label has a non-controlling 49.5% stake in Cell C but is moving to take control of the company, which it rescued through a series of recapitalisations aimed at bolstering Cell C’s balance sheet.
The application to ICASA by Cell C was triggered by TPC’s move to increase its stake in the mobile operator from 49.53% go 53.57%, giving TPC control of Cell C. We reported this move back in December 2023.
It appears that Cell C’s position has become less serious since Jorge Mendes took over as CEO. This is good news for Blue Label, whose share price has apparently underperformed in the past because of its investment in the operator.
The takeover can’t be finalised yet, however. Despite a recommendation from South Africa’s Competition Commission to its Competition Tribunal last April that the transaction should be allowed to proceed subject to certain conditions, the tribunal reportedly still hasn’t given its consent.
