Oger Telecom has appointed Goldman Sachs as it considers a sale of South Africa’s Cell C, its chairman Mohammed Hariri told Reuters yesterday.
“All options are open. If we get a good price, we will sell”, he was quoted saying, adding that the…
Oger Telecom has appointed Goldman Sachs as it considers a sale of South Africa’s Cell C, its chairman Mohammed Hariri told Reuters yesterday.
“All options are open. If we get a good price, we will sell”, he was quoted saying, adding that the company has received approaches.
Oger would prefer to retain its local business, but had no choice following regulator ICASA’s decision to lower mobile termination rates from 20 South African cents to 8 South African cents by 2017.
Cell C, the number three player behind MTN and Vodacom, has long been seen as a takeover candidate, potentially for the likes of fixed-line telco Telkom, which is 40% government owned.
“There is more impetus this time”, one observer told TelecomFinance, adding that nonetheless, there were not likely to be many suitors. Cell C is highly leveraged, and not necessarily attractive to African heavyweights such as Orange and Airtel, which would want to enjoy leading position in a new market. In-market consolidation would be easier, although a tie-up between “two complex players” would not necessarily be straightforward, the observer continued.
MTN and Vodacom, for their part, would likely come up against regulator ICASA, which is currently reviewing Vodacom’s agreed purchase of another fixed-line provider, Neotel.
Announcing FY 2014 results last month, Cell C said that its revenue had increased 16% year-on-year, with 19.6 million subscribers, an increase of 44%.
Dubai-based Oger Telecom, which also owns incumbent Turk Telekom and cellco Avea in Turkey as well as Middle Eastern ISP Cyberia, holds 75% of Cell C through 3C Telecommunications (60%) and Saudi Oger unit Lanun Securities (15%). Local black economic empowerment group Cell SAf owns the remaining 25%.
