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Myles Illidge | 12 June 2024

Cell C has informed staff of its plans to franchise 44 of the 47 retail outlets it owns as mobile operators face intense competition in the market.

It was originally reported that the decision could impact at least 400 staff. However, Cell C has denied this. Instead, it hopes to create more job opportunities.

Cell C chief officer for sales, distribution, and regions, Chris Lazarus, said the franchising process offers an opportunity to create more jobs for South Africans.

“We’re embarking on a process to franchise the 44 stores that we have,” Lazarus told Kaya FM.

“We’re also going to look at creating an opportunity of enterprise development and SMME, where our staff themselves can partake in the future ownership of some of these stores.”

He added that the franchising of 44 Cell C stores should not be seen as the company divorcing itself from the brand.

“The brand remains that of Cell C, and if anything, you’re going to see further investment in that brand over the next 18 months,” said Lazarus.

In an interview with SABC News, Lazarus said not a single staff member will lose their job.

“Any contract that we have with a staff member, the terms and conditions of that staff member will be transferred to whoever the new owner of the store is, so nobody will be impacted,” he said.

Cell C’s decision to cut costs by franchising its stores isn’t surprising, with the mobile operator’s annual results for the 2022/23 financial year revealing that it was hopelessly insolvent.

Its balance sheet showed that its liabilities exceeded its assets by R9.294 billion.

More recently, in February 2024, Cell C’s parent company, Blue Label Telecoms, revealed that the operator made a R337-million loss in the six months ended 30 November 2023.

This represented a significant swing from the R5.81 billion profit it reported for the same period in 2022.

However, Blue Label Telecoms co-CEO Mark Levy explained that the profit in 2022 was a once-off, resulting from Cell C’s recapitalisation.

Cell C’s recapitalisation took place in September 2022.

Blue Label Telecoms concluded a series of agreements with Cell C and its stakeholders to refinance the mobile operator.

Despite the challenges, Cell C remains optimistic about its prospects. In December 2023, it said its business stabilisation efforts were bearing fruit.

It said the business showed its resilience by maintaining revenue of R10.09 billion for the year-to-date to September 2023 versus R10.14 billion in 2022.

Its average revenue per user had also increased from R74 in 2022 to R80 by the end of September 2023.

‘Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER’.


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