Net1 UEPS Technologies on Monday, announced the completion of its 15 percent investment in Cell C for R2 billion and 45 percent investment in DNI-4PL Contracts, a distributor of Cell C’s mobile user starter-packs and prepaid airtime through a network of field operatives and agents.
This comes as Blue Label Telecoms on Monday also completed its bid to buy a 45 percent stake in Cell C for R5.5 billion, through its wholly owned subsidiary, The Prepaid Company.
The sale of stakes in Cell C is part of efforts to slash the mobile operator’s debts from R20 billion to R6 billion.
Net1 said the investments in Cell C and DNI were consistent with Net1’s approach of leveraging its significant and established infrastructures, and pursuing strategic acquisition opportunities or partnerships to gain access to new markets or complementary products.
Net1 is the distributor of welfare grants payments on behalf of South Africa Social Security Agency (Sassa) of more than R140 billion to more than 17 million beneficiaries through its subsidiary, Cash Paymaster Services (CPS).
Net1 chief executive Herman Kotze said the Cell C and DNI investments would allow the company to address the needs of the broader South African population by owning the value chain including the network, payment, product, distribution and hardware.
Kotze said Cell C’s management had built a demonstrable track record of navigating through a challenging environment while reinvigorating growth over the past two years.
“We are delighted to have finally concluded the investments in Cell C and DNI, and look forward to the exciting prospects that lie ahead for each of our organisations,” Kotze said.
“Our technology, products and logistical capabilities, together with Cell C’s innovative mobile competencies and customer base, and DNI’s distribution network provide an ideal opportunity to deliver a comprehensive suite of mobile, transacting and financial services to a large part of the South African population.”
Cell C’s chief executive, José Dos Santos, said the conclusion of Cell C’s recapitalisation with the introduction of key strategic partners like Net1 and Blue Label would set the third largest South African mobile operator up to be a disruptor in the traditional mobile domestic market.
“With Net1’s products, logistical expertise, technology and rural footprint, along with distribution platforms of Blue Label and DNI, we are confident of picking up a significant amount of share in an otherwise relatively stagnant industry,” Dos Santos said