Cell C adds 1.3m subscribers as turnaround gains pace
Cell C is targeting revenue growth in the upper-single-digit range in its 2027 financial year, after adding 1.3 million subscribers, growing wholesale revenue by about 20% and cutting net debt by 64% in its first full reporting period since listing on the JSE.
Cell C is targeting revenue growth in the upper-single-digit range in its 2027 financial year, after adding 1.3 million subscribers, growing wholesale revenue by about 20% and cutting net debt by 64% in its first full reporting period since listing on the JSE.
The mobile operator, South Africa’s fourth-largest, reported group revenue of R12.64 billion for the year ended 31 May 2026, up 14% year-on-year, while service revenue rose 6% to R11.64 billion.
Reported earnings before interest, tax, depreciation and amortisation (EBITDA) rose to R5.51 billion, although this included one-off gains from Cell C's restructuring transaction. Adjusted EBITDA, excluding those items, was R2.38 billion, with Cell C’s CEC acquisition from majority shareholder Blu Label Unlimited consolidated for only six months.
Cell C’s balance sheet was substantially strengthened during the period, with net debt falling from R5.69 billion, to R2.02 billion. Net debt to EBITDA improved to 1.56 times from 4.29 times.
“The balance sheet reset is now delivering real flexibility and materially lower risk,” said El Kope, chief financial officer, presenting the results this morning.
“Second-half performance is more reflective of the underlying business, and our FY27 guidance reflects improving momentum alongside continued capital discipline in an asset-light model.”
The company says its second-half performance provides a clearer picture of the state of the business following the restructuring and listing transactions. It listed on the JSE in November last year.
Cell C generated R6.96 billion in revenue in the second half, with EBITDA of R1.30 billion. Adjusted for one-off and non-cash items, second-half EBITDA was R1.46 billion.
Second-half cash capital expenditure was R415 million, taking full-year cash capex to R810 million.
Also presenting the results, Cell C CEO Jorge Mendes said the second half demonstrated the resilience of the business, with service revenue of about R6 billion.
The company generated about R703 million in cash during the year, although much of this was used to reduce liabilities and improve its working capital position.
Mendes said Cell C’s balance sheet was now fundamentally different from the solvency challenges of the past.
“The turnaround delivered what it promised. We have built network credibility, rebuilt and grown the customer base, entrenched ourselves as South Africa’s leading wholesale platform, and earned back customer trust. With the CEC integration complete, FY27 is the first full year of a new, simpler Cell C, and our 2030 strategy builds on what the turnaround created.”
Subscriber growth, MVNO boom
Cell C added approximately 1.3 million subscribers during the year, a 19% increase, taking its customer base to 8.884 million.
This excludes 5.713 million MVNO subscribers recorded on the Home Location Register (HLR).
Wholesale service revenue increased by about 20% to R1.76 billion, with Cell C estimating it holds between 80% and 85% of South Africa’s MVNO market.
The company added 1.2 million MVNO customers to its HLR during the year.
Kope highlighted the growth of the MVNO ecosystem as one of the key structural strengths Cell C had developed.
The company also recorded strong prepaid growth, with net prepaid revenue increasing 9.7%. Gross prepaid revenue growth accelerated into double digits in the second half, as historical airtime discounts normalised.
Indirect channels delivered 69% growth in gross additions and 101% growth in upgrades, while branded stores recorded a 39% increase in postpaid spend revenue.
Cell C Business, targeting small, medium and enterprise customers, was launched in January 2026, while international roaming was expanded to 120 global operators.
Network investment
Cell C continued to invest in its network and customer-facing technology despite pursuing a capex-light strategy.
The company spent R415 million on cash capex in the second half, compared with R339 million in the first half.
Data traffic increased 47% year-on-year, significantly outpacing customer growth, while voice traffic declined 4%.
Cell C said it continued to expand 4G and 5G coverage through its multi-operator core network agreements and accelerated the adoption of voice over LTE as customers migrate away from legacy 2G and 3G networks.
The operator also received independent recognition for network performance, with OpenSignal ranking it joint first nationally for network reliability and video experience.
Customer experience metrics also improved. Cell C’s Net Promoter Score increased from 19 to 33 during the year, while app users more than doubled and app revenue grew 41%.
The company refreshed 44 stores during the period, taking the total refreshed to 79 of its 103 stores, and introduced a franchise model aimed at improving service economics.
Kope said the turnaround had also created a stronger platform from which Cell C could pursue sustainable growth and scalable returns.
“We’re not changing strategy; it’s a continuation to ensure sustainable growth, scalable returns and, of course, long-term value creation,” she said.
The strategy includes growing profitably in core prepaid and postpaid segments, monetising the platform beyond traditional connectivity, scaling through capital-efficient connectivity and improving efficiency through technology, automation and machine learning.
FY27 outlook
Cell C expects FY27 to be its first full financial year as a simpler group following the completion of the CEC acquisition and integration.
The company expects revenue growth in the upper-single-digit range, based on adjusted FY26 revenue of R13.599 billion, which restates the previous year's results to include a full 12 months of CEC.
It expects to spend between R750 million and R850 million on capex in FY27, compared with R810 million in cash capex during FY26.
Adjusted FY26 EBITDA, restated to include a full year of CEC, is R2.688 billion.
Cell C says its priorities for FY27 would be to drive profitable growth in prepaid and postpaid, compound and diversify platform-led growth, manage regulatory impacts and maintain financial discipline to unlock shareholder value.
The company does not expect to pay a dividend for the period, consistent with the guidance provided during its listing process.
Mendes said Cell C’s strengthened financial position provided a platform for the next phase of its turnaround.
“The business is in a much stronger position, and that gives us confidence going into FY27. Our focus on execution will continue, growing the core carefully, scaling the platform, and turning a stronger balance sheet into real value for customers, partners and shareholders. The foundations are in place. Now the work is to build on them, consistently, and create lasting value over time,” Mendes concluded.
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