Blue Label gets the go-ahead for Cell C takeover

Blue Label gets the go-ahead for Cell C takeover

South Africa's Blue Label Telecoms has received approval from the country's Competition Commission (CompCom) to take control, via a subsidiary, of operator Cell C.

Blue Label Telecoms, which describes itself as a company that sells innovative technology for mobile commerce to emerging markets in South Africa and abroad, is already a major shareholder in the company, in which it owns 49.53%.

Earlier this week the CompCom recommended that the Competition Tribunal approve a proposed transaction whereby Blue Label subsidiary The Prepaid Company (TPC) intends to acquire a controlling stake in Cell C.

The CompCom recommended approval of the merger “subject to conditions to mitigate information exchange concerns, and conditions ensuring the continued use of certain prepaid airtime distribution channels for a period, post-merger”.

The Connectng Africa news service notes that TPC is a wholesale distributor of prepaid telecommunication products – including prepaid airtime and SIM cards. TPC purchases these products from South African mobile operators, including Cell C, and sells them on to distributors, merchants and retailers.

Cell C also sells its own prepaid airtime directly to dealers, retailers and end-consumers through the Cell C app and its retail stores. 

Cell C has faced some serious financial challenges in recent years, leading to recapitalisation, roaming deals with partner networks MTN and Vodacom, and, last June, a move to a virtual radio access network model.

This meant it switched off all its own tower infrastructure and handed over the building and operation of its cellular network to fellow South African operator MTN.

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