Analysts said on Friday that Cell C is stepping ahead after the telecoms operator raised revenues and earnings before interest, tax, depreciation, and amortisation (Ebitda) for the full year to May 2026 while net debt also reduced.
Greg Davies, the head of wealth at Cratos, said Cell C had notched “a strong step forward” as full year revenues lifted 13.5% to R12.6 billion, with adjusted Ebitda strengthening 16.9% to R2.38bn.
“Net debt fell dramatically from R5.7bn to R2.0bn, reducing financial risk and giving the group far more flexibility,” said Davies.
The company, however, did not declare a dividend for the period, in line with the guidance at the company’s Initial Public Offering (IPO) in November 2025. Shares in Cell C tipped about 3% on Friday to R26.
Standard Bank analysts said Cell C's fundamental recovery and balance sheet restructure could push it to become a more viable competitor in the South African telecoms sector over the coming periods.
“This could intensify an already competitive market structure with four sustainable players and MVNOs. We therefore expect the market to remain challenging for larger incumbents who also have to absorb double-digit declines in mobile voice revenue,” said the analysts.
Cell C CEO, Jorge Mendes, said the outlook for the company’s current operating year is likely to be characterised by constrained consumer spending, although demand for data is likely to provide some respite.
“Competition across the sector is intense and the regulatory landscape continues to evolve. At the same time, demand for data and digital connectivity continues to grow, creating opportunities for operators that can deliver value, flexibility, and innovation efficiently,” said Mendes.
Cell expects further impacts from lower interconnect tariffs. Furthermore, revenue growth from January next year will also be impacted by the implementation of data rollover regulations.
During the period, Cell C’s prepaid segment performed well in a “tough market” with the acquisition and integration of CEC restoring full control for the post-paid category.
The prepaid segment strengthened revenues by 9.7% to R5.8bn, with “growth supported by the normalisation of historical airtime discounts and a meaningful recovery” in the customer base.
Cell C’s wholesale operations scaled “on the strength” of its mobile virtual network operating ecosystem.
The telecoms operator raised total subscribers over the year by 1.3 million to 8.9 million, with an additional 5.7 million MVNO registered users.
This helped the company to raise data traffic up 47% on a year-on-year basis, although voice traffic for the same period was down 4%.
“The first half was defined by the successful completion of our restructuring and initial public offering, leaving the group with a significantly stronger balance sheet and positioning us to execute our strategy as a newly listed company. The second half was about execution, integrating CEC, operating as a single business, and demonstrating the growth potential of our asset‐light, partnership‐led platform,” said Cell.
Other revenue drivers constituted of roaming and incoming revenues, digital services, fibre, and enterprise declined during the period, primarily due to the regulated reduction in mobile termination rates. However, enterprise remains an important long-term growth opportunity for Cell C.
The company closed the period under review with net debt of R2bn, down by some R3.6bn from the previous contrasting period’s R5.7bn.
It attributed the reduction in net debts to the debt-to-equity conversions of R3.6bn and the lease settlement of R0.5bn, which was partially offset by the increase in banking facilities as a result of the CEC acquisition.
This left the group’s cash and cash equivalents at R133 million, down from R182m in the prior year.
THE NATIONAL