South African Network Surpasses Sales Targets

South Africa's newest GSM network, Cell C says that it is celebrating its first birthday this month with the knowledge that the business plans laid out at its launch have been more than achieved. When Cell C was launched a year ago, predictions were that the market would top out at 11 million by the end of this year. Based on the phenomenal growth experienced so far, that figure is likely to be over 12 million and Cell C has more than achieved its initial subscriber targets. Its subscriber base has grown to more than one million, well over the original prediction of 800, 000 by the end of year one of operation.

The growth of the market has also prompted the operator to revise initial estimates of subscribers and now Cell C aims to capture more than 20% of new growth in the market.

With churn rates of around 30% for prepaid and 15% for postpaid, and expectations that these numbers are likely to increase, Cell C expects to capture over 20% of the overall cellular market (3.5 to 4 million subscribers) by 2007.

Cell C's funding remains on track with Saudi Oger who have provided US$150 million of the equity. A further US$100 million in equity will be provided by CellSAf by the end of 2002. Cell C says that it is also currently drawing on a bridging loan of US$168 million from Siemens through extended equipment purchase, and from a junior debt facility of US$175 million.

Cell C chairman and CEO Talaat Laham says "the company's business plan shows we will be cash-positive in 2005 and profitability will be positive in 2004. The break even point gets closer with each additional subscriber signed on."

Cell C is owned by 3C Telecommunications, which in turn is jointly owned by Saudi Oger (60% shareholder) and CellSAf (40%), a consortium of 33 black empowerment companies."

Posted to the site on 15th November 2002