Oger Telecom is looking at the possibility of selling its majority stake in Cell C, South Africa’s third-largest mobile telecoms network operator, the chairman of the Middle Eastern firm told Reuters on Thursday.
Goldman Sachs has been appointed by Oger Telecom to help with the process, Mohammed Hariri told Reuters in an interview in Dubai.
“All options are open. If we get a good price, we will sell,” Hariri said, adding it had been approached by several interested parties but no firm decisions had been made. He declined to name the parties.
Hariri said the decision by Oger, which owns 75 percent of Cell C, was triggered by the South African telecoms regulator’s revised plan for cutting the termination fee which operators charge competitors to carry their calls.
“For us, if we get a proper value, we’d rather not continue. If the termination rates were honoured as original, we would have stayed easily,” he said.
The Independent Communications Authority of South Africa (ICASA) announced in February last year that it planned to halve by 2016 the termination fee of 20South African cents a minute, a move which brought a legal challenge by the country’s two largest operators — MTN and Vodacom.
The ICASA then revised its plan in September, deciding that rates should instead be cut to 8 cents by March 2017.
Providers with smaller customer bases are most sensitive to changes in the termination fee, since more calls made by their users are to customers of other networks.
Cell C has been in an aggressive price war with its two main rivals in a bid to gain market share. It had 19.6 million users at the end of 2014 with revenue up 16 percent last year.
Source: http://www.moneyweb.co.za/news/south-africa/cell-c-majority-stake-for-sale/
