Cell C licence transfer row
NO MEETING TO DISCUSS THE MATTER Important shareholder objects as it was not informed of the transfer of an asset worth billions.
An objection by CellSAf, a big shareholder in Cell C, might sink the scheme by mobile operator Cell C and major shareholder Blue Label Telecoms to transfer the network’s operating licence as well as its rights to operating frequencies to a Blue Label subsidiary.
CellSAf points out that the licence is worth billions in itself and the Independent Communications Authority of SA (Icasa) cannot allow the transfer.
While Blue Label is the largest shareholder in Cell C (49.5%), CellSAf is an important shareholder – it holds 25%, and is Cell C’s (women-owned) black economic empowerment (BEE) partner.
“As CellSAf, we don’t know what is their motivation behind transferring the licence from Cell C to Blue label. The licence is owned by all shareholders, including CellSAf, as their B-BBEEE partner,” said Nomonde Mabuya, director of CellSAf.
“We were never called to a meeting of shareholders to discuss this transfer of the licence from Cell C to Blue Label, despite us being the founders of this company in 1999.
“The spectrum licence was awarded to CellSAf, not Blue Label, by SATRA (South African Telecommunications Regulatory Authority) and the then minister of telecommunications, Dr Ivy Matsepe-Casaburri.
“This was an empowerment licence as the third cellular licence. CellSAf represents over 30 historically disadvantaged black companies and social empowerment groups, and women groupings,” she added.
Indeed, the Government Gazette that published the notification of the application to transfer the licence noted that any application such as this will consider BEE status.
“Transfer applications will be evaluated on the basis of the following criteria:
1.a) Promotion of competition in the ICT sector;
2.b) Interests of consumers; and
3.c) Equity ownership by Historically Disadvantaged Persons.”
Mabuya said that Blue Label is applying for the transfer of the licence without any approval from CellSAf, an important shareholder.
“CellSAf is opposing the transfer as we are the rightful owners of this licence. This licence was awarded to us, long before Blue Label Telecoms arrived.
“At the very least, we should have been consulted and our approval should have been obtained first before the application to Icasa. We only saw the application to transfer our licence for the first time on 6 December, 2023 in the Government Gazette, despite having had meetings to discuss other matters with senior Blue Label executives during August, October and November 2023.”
Mabuya said the licence is worth between R6 billion and R7.8 billion.
“Blue Label did not offer to pay CellSAf or any of the other shareholders anything, and they want control of our licence,” she said.
Security
The transfer of the spectrum licence from Cell C to the Blue Label entity The Prepayment Company has far-reaching implications for Cell C, as well as the creditors of the third largest cellular network, which has been struggling since its inception.
Surely moving an asset deemed to be worth billions – without any remuneration – out of Cell C will impact on Cell C’s balance sheet. This would be a concern for creditors.
Unfortunately, Blue Label did not respond to queries in this regard, nor to other questions – and financial information about Cell C is difficult to come by.
CellSAf maintains that Cell C did not call a board meeting to discuss the transfer of the licence, or raise the issue of transferring the operating licence with all the shareholders.
Mabuya says CellSAf expects that Icasa will communicate its decision on the matter toward the end of next month.