Cell C prepaid growth driven by wider distribution, new products

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New distribution channels, alternative handset financing products and sharper commercial execution helped drive strong growth in Cell C’s prepaid business during the 2026 financial year to May.The prepaid segment was one of the standout performers in the year, helping Cell C add 1.3-million subscribers while net prepaid revenue increased 9.7% to about R5.8bn. Group revenue rose 14% to R12.64bn.CEO Jorge Mendes said the growth stemmed from a combination of wider distribution, new products and improved customer value management rather than any single initiative.“It’s a combination of things. It’s channels we were not in before. It’s products that we didn’t have access to before, like FoneYam in Pepkor,” Mendes said after the release of the group’s full-year results.FoneYam, which rents entry-level smartphones to consumers, has improved access to devices in a market where affordability remains a key constraint.Mendes also attributed the performance to stronger commercial discipline and improved arrangements with distribution partners.We’ve got great performance in Limpopo and Mpumalanga from a percentage growth point of view. That’s outperforming the market quite significantly— Jorge Mendes, Cell C CEO“It is our customer value management proposition. It’s the commercial astuteness on contracts. What do you pay for ongoing revenue, commercial support, marketing support, connection incentive bonuses and all these kinds of things? Those areas have improved materially,” he said.The company has also expanded beyond traditional retail channels through new wholesale and distribution partnerships, while its improving network reputation has strengthened its competitive position in the prepaid market.“On the basis that we’ve got a great network quality, customers are able to get great prices and great value on a fantastic-quality network. More distribution channels with different product sets, combined with that network quality, gives you the kind of lift that we’ve achieved,” Mendes said.Regionally, Limpopo and Mpumalanga were the strongest-performing provinces from a growth perspective.“We’ve got great performance in Limpopo and Mpumalanga from a percentage growth point of view. That’s outperforming the market quite significantly,” Mendes said.Gauteng, Cell C’s largest market, also delivered strong revenue growth, while the Eastern Cape and KwaZulu-Natal posted solid performances. North West exceeded expectations and recorded strong revenue gains.“Gauteng is really flying. The Eastern Cape is doing really well, and we’ve seen big revenue gains in our traditional stronger revenue areas,” he said.The Western Cape was the only region where growth lagged the pace seen elsewhere, though it remained positive.“There is probably a little bit of pressure in the Western Cape on growth rates. It’s still trending positively, but lower growth than provinces such as Limpopo and Mpumalanga,” Mendes said.There are a lot of initiatives in play, but we’ve taken a very prudent view of saying integrate, fix, try and get the bad debt better managed, get the credit rating improved— MendesWhile prepaid delivered the strongest momentum, management expects its postpaid division to gain momentum as the integration of Comm Equipment Company (CEC) beds down and new sales channels begin contributing. It is laying the groundwork for renewed growth in postpaid. Cell C acquired CEC, which managed the postpaid client base, from Blue Label.Mendes said the priority over the past six months had been integrating the business, improving credit quality and cleaning up the inherited customer base rather than chasing subscriber growth.The company reduced the number of lower-value subscribers from about 90,000 to 15,000, replacing roughly 75,000 customers with higher-value users while keeping the overall base broadly stable.“That’s allowed us to improve our ARPU [average revenue per user]. ARPU improved, revenue improved, customer base largely flat,” he said.Cell C is now rolling out stricter credit vetting, negotiating improved funding arrangements with banks and expanding device-financing options to attract higher-value customers. The operator has also secured access to new channels, including a physical presence in iStore outlets, and increased its telesales partners from five to 11.“There are a lot of initiatives in play, but we’ve taken a very prudent view of saying integrate, fix, try and get the bad debt better managed, get the credit rating improved,” Mendes said.He cautioned that meaningful postpaid acceleration would take time as the integration process is still at an early stage.“A huge amount of work has been done, but it’s only six months,” he said. “This will take another six to 12 months to continue the positive trajectory, but you really start gaining a little bit of momentum.”