Cell C has posted a return to profitability for the year ending May 2025, marking a pivotal moment in its long-running turnaround efforts. After years of financial strain and restructuring, the operator delivered both net profit and meaningful growth across several strategic business lines, positioning itself for more sustainable momentum going forward.
Financial Performance: A Shift Toward Stability
The operator recorded a 4% increase in total net revenue, rising to R11.14 billion from R10.75 billion in FY24. Service revenue grew by 6% to R11.97 billion, driven by a healthier customer mix and stronger engagement.
Two areas stood out as major contributors:
- Prepaid broadband revenue jumped 18% year-on-year, supported by a 31% surge in mobile data traffic.
- Wholesale and MVNO revenue climbed 13%, lifting its share of service revenue from 12% to 13%.
Earnings before interest and tax (EBIT) rose 5% to R1.58 billion, lifting EBIT margins to 14%. Profit before tax reached R280 million, a sharp swing from just R9 million in the prior year. While operating expenses rose 16%, Cell C’s cost discipline and reduced finance charges offset much of the pressure.
Strategic Growth Drivers
Broadband as a Core Pillar
Cell C’s prepaid broadband business is emerging as a central growth engine. With South Africans consuming more data through streaming, gaming, and digital services, Cell C’s bundling strategy has converted higher traffic into revenue and deeper customer engagement.
MVNO and Wholesale Expansion
The wholesale division is proving to be a reliable source of recurring income. Hosting MVNOs offers steady growth without heavy infrastructure investment, reinforcing Cell C’s “capex-light” approach. This segment continues to scale as a meaningful complement to the consumer business.
Customer Base Optimization
The operator’s total customer base remained stable at 7.6 million. Instead of aggressively chasing volume, Cell C focused on improving customer quality. ARPU dipped slightly (R78 prepaid and R224 postpaid), but data usage rose sharply, reflecting stronger overall engagement.
Operational Transformation
Beyond financial metrics, Cell C’s operational transformation has started to yield visible results:
- Network quality improved, with Opensignal awarding it the “Best Overall Video Experience” in South Africa in 2024.
- Innovation milestones included Africa’s first cloud-native VoLTE call on AWS, only the second globally.
- Customer experience was refreshed through a redesigned app, refurbished retail stores, and a brand relaunch that restored market recognition in the Kantar BrandZ Top 30.
Outlook: Momentum Into FY26
Looking ahead, Cell C intends to accelerate its postpaid integration, expand wholesale and MVNO partnerships, and scale enterprise and fibre services. Management has emphasised continued cost discipline and operational execution as key to sustaining profitability.
CEO Jorge Mendes commented: “This year’s results prove that Cell C is back in profit and with momentum. The combination of topline growth, stronger margins, and disciplined cost management sets us apart in the market.”
Geekhub Analysis
Cell C’s return to profit is a significant milestone, but the sustainability of this performance will be closely watched. Competitive intensity in South Africa’s telecom sector remains high, and rising operating costs could erode margins if not carefully managed.
What stands out is Cell C’s shift away from chasing scale at all costs. By focusing on broadband demand, wholesale revenue, and higher-quality customers, the company is building growth engines that offer predictability and resilience.
For the first time in years, Cell C is not just surviving. It is showing signs of building a more durable, disciplined business model.
