Cell C today released its financial results for the year ending 31 December 2016, posting its first profit of R540 million. The profit follows strong operational and financial growth across key financial indicators.
“The 2016 financial year was exceptionally challenging, with South Africa’s economic growth essentially flat. Despite this, the company delivered solid results,” says Cell C Chief Executive Officer, Jose Dos Santos.
Cell C increased its total revenue by 11% to R14.6 billion and service revenue by 8% to R11.8 billion in 2016.
“The strong revenue growth was the result of a focused strategy of innovation, exceptional value in product offerings and a customer-centric approach to how Cell C services its customers.
Service revenue was driven largely by the growth in data volumes, which increased by 67% in the reporting year. Data revenue was up 35% year-on-year to R4.4 billion.
“While we did see a marginal decline in traditional voice traffic, in favour of other voice technologies, this was offset by the massive data growth,” says Dos Santos.
Another financial highlight has been the strong growth in Cell C’s MVNO segment. Wholesale revenue increased 147% year-on-year to R370 million in revenue.
EBITDA increased significantly by 59% to R3.1 billion during the year under review. EBITDA margin increased by 7% from 15% in 2015 to 21% in 2016 through a combination of increased revenue and cost management and savings initiatives.
Cell C increased its customer base by 20% from 12.8 million to 15.3 million customers.
During 2016, Cell C invested approximately R3.4 billion in its network and other fixed and intangible assets, rolling out predominantly LTE and LTE-Advanced. Cell C’s total capital expenditure over the last four years amounted to more than R11.6 billion.
“We’ve delivered on our promise to provide real value to consumers and despite already offering some of the lowest tariffs in the market, Cell C reduced the effective data rate by more than 20% during the last financial year,” says Dos Santos.
Cell C’s products and services were supported by significant investments in its infrastructure with the rollout of additional sites over the last financial year. Cell C now has approximately 5000 sites; of which 2500 are LTE and more than 2000 are LTE-Advanced.
In 2016, Cell C commenced the replacement of the Core Transmission legacy SDH technology with new IP-MPLS and DWDM Core. This was done to increase capacity to support the data growth on its network; reduce reliance on third party transmission providers; and improve network redundancy.
Cell C has achieved great success in its approach to embrace and partner with over-the-top players such as Facebook and WhatsApp. These unique value-added services have proved attractive and driven customer acquisition and retention.
In addition, Cell C’s innovative drive to offer customers alternative technologies like Wi-Fi Calling has enhanced the overall customer experience while providing the company with alternative revenue streams. Cell C became the first mobile operator in Africa to offer Wi-Fi Calling on Apple handset devices in 2016 and currently offers this service across more than 20 devices. It remains the only operator in SA to offer this service commercially to its customers.
Cell C has also placed a strong focus on customer service and efforts have paid dividends with significant improvements in service metrics across the board.