Cell C licence control transfer explained

Cell C explained that it applied to ICASA to transfer control of its telecommunications licenses because of its major shareholder exceeding 50% shareholding.

Blue Label Telecoms’ The Prepaid Company (TPC) is increasing its Cell C shareholding by 4.04% to move from a non-controlling holding of 49.5% to a controlling share of 53.5%.

Cell C explained that the ICASA application is a fulfilment of a governance process necessary in the regulatory framework.

“This entails a filing with the Competition Commission and ICASA for the approval of the transfer of control,” it said.

The license transfer application sparked industry speculation that TPC is trying to gain control over Cell C’s valuable spectrum licenses.

However, this is not the case. The reason why Cell C was required to submit the application to ICASA is because TPC will become a majority and controlling shareholder in Cell C.

ICASA published a “Memorandum Regarding Control” on 31 March 2021, which stated a party is deemed to control a licensee if it owns more than 50% of the shares in the licensee.

As TPC’s shareholding would exceed 50%, Cell C was obliged to apply to ICASA to acquire the additional 4.04% in Cell C.

The licences will continue to be owned by Cell C, and Cell C will continue to provide the licensed services. 

Cell C highlighted that the spectrum licences will not be transferred to any party. Cell C will continue to hold, use, and pay for the spectrum.

The mobile operator added that it will continue to provide the licensed services and to discharge its licence obligations.

“Cell C is undergoing a change of shareholding, which will trigger a change of control of the licensee,” it said.

The screenshot below, from ICASA’s “Memorandum Regarding Control”, explains the change in control.