Blue Label Telecoms closer to control over Cell C
BLUE LABEL Telecoms (BLT) moved closer to taking control of mobile operator Cell C after the Competition Commission (CCSA) said yesterday that it had approved BLT’s acquisition of an additional 4.04% stake in Cell C, with conditions. Blue Label’s share price dropped 5.77% to close at R4.41 on the JSE yesterday.
Previously BLT’s subsidiary, The Prepaid Company (TPC), was Cell C’s major shareholder.
The commission said in a statement that it had recommended that the Competition Tribunal conditionally approve the proposed transaction between TCP and Cell C.
BLT is not controlled by any single shareholder. TPC controls Blue Label Connect and Comm Equipment Company
among others. After supporting Cell C through two recapitalisation processes over 8 years, TPC plans to acquire a further 4.04% stake in Cell C, to take its shareholding to a controlling 53.37%.
Cell C said recently that the increased shareholding by TPC was in the best interest of Cell C and its stakeholders, as it would enhance the long-term sustainability and growth prospects of the cellphone provider.
Cell C, which would continue to operate as a licensee providing mobile services to its customer base, said its shareholders had supported it through two recapitalisation processes in the past 8 years.
“TPC … has made a substantial investment in Cell C and continues to provide much needed financial support. TPC’s increase in shareholding is a clear demonstration of the ongoing investment it has made in Cell C and its firm commitment and belief that Cell C will rebuild its market share in a sustainable manner,” it said in a recent statement. “The mobile telecommunications industry will benefit from effective and thriving competition, which ultimately is positive for the consumer,” Cell C said.
“The commission has recommended that the tribunal approves the merger subject to conditions to mitigate information exchange concerns, and conditions ensuring the continued use of certain prepaid airtime distribution channels for a period, postmerger. The proposed transaction does not raise public interest concerns,” the commission said yesterday.
Meanwhile, TPC has also applied to telecommunications regulator Icasa for approval to transfer Cell C’s spectrum licences to it.