Shares in Blue Label Telecoms enjoyed a rare upswing on Friday, a day after it issued a trading update that showed its core business continues to perform well despite the ongoing woes at Cell C.
Net1 UEPS Technologies has become the second JSE-listed company, after Blue Label Telecoms, to delay publication of financial results because of the ongoing financial woes at Cell C.
Cell C has moved to justify its decision to terminate its wholesale fixed-LTE offering, saying customers of the service made up just 0.5% of its base but were using 20% of its data network capacity.
S&P Global Ratings has downgraded Cell C’s debt to “D”, or “default” – its lowest-possible “junk” rating – after the mobile operator “failed to make interest payments on certain bilateral loan facilities” due last month.
Cell C’s largest shareholder, Blue Label Telecoms, will delay publication of its full-year financial results until late September to deal with various issues related to the mobile operator’s recapitalisation and restructuring.
Regulators, including Icasa and the Competition Commission, will have to be pragmatic and lenient about a looming expanded tie-up between Cell C and MTN South Africa if the former isn’t going to go to the wall.
Cell C has missed several payments to national roaming partner MTN South Africa, underscoring the dire financial straits in which the country’s third-largest mobile operator finds itself.
S&P Global Ratings has downgraded Cell C’s debt rating further after the troubled mobile operator amended a private “airtime facility” agreement that the agency described as being “tantamount to a selective default”.