Middle East investors to increase control over Cell C

Saudi Oger, which is part of Oger Telecom controlled by the Hariri family of Lebanon, holds a 60% in Cell C, while at the moment; local empowerment partner CellSaf holds a 40% stake in the operator.

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By  Tawanda Chihota Published  May 14, 2005

Middle East interest in South Africa’s third mobile operator – Cell C – looks set to increase, with the country’s telecoms regulator ICASA, set to rule on whether local investor CellSaf can sell a 15% stake in the operator to Lanun Engineering of Saudi Arabia. Saudi Oger, which is part of Oger Telecom controlled by the Hariri family of Lebanon, holds a 60% in Cell C, while at the moment; local empowerment partner CellSaf holds a 40% stake in the operator. Under current licence conditions, Cell C requires at least 40% local ownership, though the local investor CellSaf has failed to raise the funds required to maintain its stake at this level. According to local reports, CellSaf is now looking to sell a 15% stake in Cell C for US$180 million and should ICASA approve the deal, the country's third mobile operator will be 75%-owned by Middle East investors. ICASA will invite submissions from interested parties ahead of the hearings expected during the week of May 23 to 27 in Johannesburg. Cell C reported turning EBITDA (earnings before interest tax, depreciation and amortisation) positive on a monthly basis at the end of May 2004. Since it was established in November 2001, the company has committed R7.3 billion (US$ 1.16 billion) in its operations, of which about R4.5 billion was spent in South Africa. As at the end of March 2004, Cell C's market share stood at 12.5% of the total active subscriber base or just over 2 million active subscribers. Of this active base, over 330,000 (16%) were post-paid subscribers and over 1.7 million (84%) were prepaid subscribers.

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