Cellular network operator Cell C has reported R442 million earnings before interest, tax, depreciation and amortisation (EBITDA) for the 2005 financial year.
The figure is a milestone for the company, which in 2004 incurred an EBITDA loss of R47 million and in 2003 a loss of R1.09 billion.
Revenue for 2005 amounted to R5.5 billion, up 34% from the R4.1 billion of the previous year.
Chief financial officer Muhieddine Ghalayini says the group experienced steady growth in subscriber numbers, both on a quarter-to-quarter basis as well as on an annual basis.
Active subscribers totalled 2.92 million at the end of the year, compared with 2.7 million at the end of the third quarter and 2.18 million at the end of last year.
The number consists of 667 000 postpaid subscribers, 2.22 million prepaid subscribers and 35 000 community service telephones (CSTs). Blended average revenue per user, including CSTs, rose from R142 to R147.
Cell C has to roll-out 52 000 CSTs by 2008 as one of the conditions of its licence. It rolled out 7 000 CSTs during the fourth quarter of 2005.
Number portability
Ghalayani says although Cell C has not achieved a net profit, it could have done so "had the rand behaved".
Most of the operator`s debt is foreign-denominated.
Cell C is betting on mobile number portability (MNP) to boost its subscriber numbers. MNP means that a subscriber can move from one operator to another but keep the same phone number.
Steve Bailey, finance director of Cell C Service Provider, says Cell C has been advocating MNP since being licensed. "MNP will enhance competition by removing the single greatest barrier to switching networks," he says.
CEO Talaat Laham says the 50% joint venture with Virgin Mobile, due for launch later this year, is expected to boost revenue. However, he would not comment on detailed plans, citing confidentiality agreements.
Other plans for this year include bringing the number of base stations up from 2 118 to 2 334, which will mean Cell C will carry 85% of its traffic on its own network, compared with 81% at the end of the 2005 financial year.
The delivery of a 3G offering is also in the pipeline. Laham says the group has a WiMax testing licence and is in the process of testing the technology.
WiMax - Worldwide Interoperability for Microwave Access - is a wireless technology providing high-throughput broadband over long distances.
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