South African mobile operator Cell C has received almost ZAR6 billion (US$608 million) in capital funding, with another substantial round expected next year, in response to the regulator’s ongoing review into the cost of communication.
Majority shareholder Oger Telecom has made the biggest single investment by pumping a further ZAR3.5 billion (US$350 million) into Cell C.
A further ZAR2.2 billion (US$223 million) has come from Nedbank and the Development Bank of Southern Africa (DBSA) in a long-term financial package arranged by the former.
The sudden injection of funds, Cell C said, is the direct result of the Independent Communications Authority of South Africa (ICASA) beginning a fresh investigation into the cost of communications in the country, including another look into Call Termination Regulations.
Mohammed Hariri, chairman of Cell C and Oger Telecom, said: “Under the leadership of Alan Knott-Craig, Cell C has gone from strength to strength.
“The company has a solid business strategy and we are confident that the Regulator will make decisions that give smaller players a better chance of being sustainable competitors. It is on this basis that we as shareholders are fully committed to the company and the country.”
Cell C currently has more than 11.5 million subscribers in South Africa and Cell C chief executive officer (CEO) Alan Knott-Craig said the increased investment shows shareholders have confidence in the network and the future of the industry.
He added: “The equity injection also strengthens our balance sheet. But Cell C needs aggressive and proactive regulatory support to continue its drive to reduce the cost to communicate in South Africa and remain sustainable in the process.”
Oger Telecom made a similar investment in 2012 which amounted to US$200 million and a further “significant investment” is expected in 2014.
Knott-Craig said the money would be used to continue investing in network quality, customer base and product offerings.