No love for Cell C
Top analysts are not enthusiastic about Cell C’s upcoming listing on the Johannesburg Stock Exchange (JSE), saying the company faces an uncertain future.
Cell C is currently majority owned by Blu Label Unlimited (BLU), which holds a 59.66% stake in the mobile operator through The Prepaid Company (TPC).
However, this is set to change. Cell C recently launched its initial public offering (IPO), which closes at midday on Friday, 21 November 2025.
The IPO comprises up to 173.4 million ordinary shares, alongside an additional 9.52 million shares available through an overallotment option.
This collectively represents up to 53.8% of Cell C’s issued share capital post-listing, Cell C said in its abridged pre-listing statement on Thursday.
Cell C and TPC are targeting gross proceeds of up to R6.5 billion from the sale of shares, including an overallotment of R338 million.
The mobile operator stated the proceeds would be used to settle certain interest-bearing borrowings and other debt obligations.
“Additionally, a portion of the funds will be earmarked for dividends to shareholders, reflecting BLU’s commitment to delivering value to its investors,” it said.
Some of these shares will be transferred to the Cell C executive team, such that they will collectively hold 4.5% of the company’s shares.
Together with the listing, TPC will make an offer to sell shares intended to raise approximately R7.7 billion. TPC intends to use the proceeds from the sale of shares to enhance its financial position strategically.
The proceeds raised will be allocated towards settling certain interest-bearing borrowings and other debt obligations.
A portion of the funds will be allocated for dividend payments to shareholders. The remaining excess proceeds will be used to meet working capital requirements.
Analyst opinion about Cell C
Many top analysts have expressed doubt about Cell C’s prospects, given the local telecommunications environment and its market position.
Capicraft Investment Partners CEO and portfolio manager Drikus Combrinck said the South African mobile market is highly competitive.
He pointed to MTN and Vodacom’s recent results, which showed that their local operations are under pressure.
Another challenge is that Cell C is beholden to MTN and Vodacom to use their network infrastructure, which can result in margin pressure.
Benguela Global Fund Managers CIO and co-founder Zwelakhe Mnguni shared Combrinck’s view on Cell C.
“I am cautious about Cell C’s growth momentum after the listing. To achieve growth in the highly competitive local telecommunications market is difficult,” he said.
Sasfin Securities’ David Shapiro said he does not like the South African telecommunications industry as an investment sector.
“It is far too competitive. As soon as you gain customers, you can lose them when a lower-priced offer comes to the market,” he said.
PSG’s Schalk Louw shared Shapiro’s opinion, stating that with Vodacom, MTN, Rain, Telkom, and Cell C competing for customers, it is challenging.
“Many telecommunications players are competing in a tough market environment. It is not easy,” Louw said.
However, SouthernCross Capital CIO and portfolio manager Cobus Potgieter has a different view.
He said he was excited about Cell C’s listing. “It is good to see the turnaround play come to market,” he said.
“I have liked Cell C inside of Blu Label Unlimited for the past year. It was clear that its MVNO strategy is a great business model,” he said.
He highlighted the successful launch of Capitec’s mobile product, where Cell C serves as its backend MVNO provider.
Potgieter pointed out that he will still need to properly examine the finances and valuation before deciding whether to invest in the company.
Cell C finances
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