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#41 Spell Jammer

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Posted 20 September 2018 - 09:32 AM

The Levy brothers have only been involved in the last 9 months, it is a turnaround story unfolding.  Vumatel has a total different target audience and is focusing on fibre sharing.  That is the same as sharing a straw to drink a double thick milk shake. But let's not get lost in the woods.  

Fact is since turn-around started the nett loss has decreased 33% (despite 28% decline in data prices)- logically that will take at most 2 more quarters to get CellC into positive territory.  Best is some of the financing is done through airtime (vapor currency). 

For argument sake, lets say in the next quarter CellC has another loss (at 33% decreased) it will be a R 300 million loss.  And let's argue that they repeat the 56% net profit growth from the current R 1.4 billion.  Think that covers the loss with a smile with some change left and guess there is some tax benefits in there too.  

This doesn't make sense. Cell C partners with Fibre Network Operators like Vumatel and provide their fibre on an open access network by making services available to ISP's like Cell C? Vumatel is the Multichoice of Fibre in SA at the moment.

 

Let me ask you this. Why do you value Cell C a a loss making entity at a higher share price than profit making Telco's like Vodacom and MTN? These profit making Telco's share prices are in the doldrums at the moment? Why is Cell C a special case for you when they are in a worse financial position?


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#42 Ms Jet

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Posted 19 September 2018 - 08:55 PM

Thanks..going hold then
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#43 JK001

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Posted 19 September 2018 - 07:32 PM

Thank you for help..

You are welcome.  I am in at average R 7.06, but will buy more on payday.  So your R 6,18 is still a bargain.


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#44 Ms Jet

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Posted 19 September 2018 - 06:48 PM

Thank you for help..
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#45 JK001

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Posted 19 September 2018 - 06:38 PM

Fibre revenue (not profit) only accounted for R62 million this year. Even if they grow Fibre by 300%, thats still nowhere near enough to warrant a R9-10 share price, especially given Vumatel's aggressive plans in this space.  Fibre is not even 1% of their total revenue yet they lost R1.5 BILLION in the last 2 years.

 

The Levy brothers have only been involved in the last 9 months, it is a turnaround story unfolding.  Vumatel has a total different target audience and is focusing on fibre sharing.  That is the same as sharing a straw to drink a double thick milk shake. But let's not get lost in the woods.  

Fact is since turn-around started the nett loss has decreased 33% (despite 28% decline in data prices)- logically that will take at most 2 more quarters to get CellC into positive territory.  Best is some of the financing is done through airtime (vapor currency). 

For argument sake, lets say in the next quarter CellC has another loss (at 33% decreased) it will be a R 300 million loss.  And let's argue that they repeat the 56% net profit growth from the current R 1.4 billion.  Think that covers the loss with a smile with some change left and guess there is some tax benefits in there too.  


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#46 Ms Jet

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Posted 19 September 2018 - 05:12 PM

Oouch....i biught at 6.18....not sure whether to cut losses or hold for how long it takes for rise....any opinions
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#47 Rex

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Posted 19 September 2018 - 04:36 PM

This share is still crashing


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#48 Polly

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Posted 17 September 2018 - 03:32 PM

Mr Market valuing Cell C at zero to negative value.  IMO it deserves that rating.  Blu hopelessly overpaid and will now have to carry the bag going foward


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#49 Spell Jammer

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Posted 17 September 2018 - 03:29 PM

Spell jammer...hi...so what do you think value is ?

There's a downward trend on all Telco's at the moment given revenue and regulatory pressures. Cell C has to demonstrate something spectacular in their next set of results for me to be convinced, and that's just Cell C and not Bluetel's other core operations in Mexico etc.

 

https://za.investing...ell-c-200197476


Edited by Spell Jammer, 17 September 2018 - 03:29 PM.

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#50 Ms Jet

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Posted 17 September 2018 - 01:42 PM

Spell jammer...hi...so what do you think value is ?
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#51 Spell Jammer

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Posted 17 September 2018 - 08:39 AM

Jet, why i believe the answer is yes.  Firstly R360 million of CellC loss was due to forex.  Now you could argue that the rand declined against the dollar and yes that affects companies that does not do hedging (buying currency upfront at an agreed rate).  The Levy brothers helped to reduce the R1 Billion anticipated loss by R 400 million to R600 Million.  So, let's say they improve it with only another R 300 million and have R 300 million less currency losses CellC would be profitable by maybe as soon as Feb next year.

 

They rolled out fibre to 16000 houses in one year.  Massive uncap demand for data - fibre is mostly subscription based and uncapped data, so the price of data does not matter then.  

 

They enlisted 64 mobile virtual network operators including FNB that is quoted below that Telkom and CellC should merge.  Funny how this guy from FNB is questioning FNBs strategy to become a MVNO (by implication).   

 

You cannot compare them to MTN, Telkom and Vodacom as theirs are different strategies.    

 

Fact is the commodity (airtime and data) they sell is not tangible or manufactured in a factory.  It is measured by the time and capacity of using technology infrastructure. They have an infrastructure agreement with MTN and with 2 internet service providers.  So, all this talk about CellC that will actually just be fine.

 

Now, lets look at BLU before CellC. BLU share price was more than R20 a share. That business is still as solid as it was and the massive capex spent on infrastructure in Mexico and India is almost paid off. 

 

If you take a 50% discount for doubt and investor jittery (lack of understanding tech) then R9-10 a share is not unrealistic.

 

I always like to see if the execs believe in their own company, so I look at the SENSE and see if they personally buy their own company shares.  They are.

Fibre revenue (not profit) only accounted for R62 million this year. Even if they grow Fibre by 300%, thats still nowhere near enough to warrant a R9-10 share price, especially given Vumatel's aggressive plans in this space.  Fibre is not even 1% of their total revenue yet they lost R1.5 BILLION in the last 2 years.


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#52 Ms Jet

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Posted 16 September 2018 - 09:54 AM

I see there agm end nov...are we expecting increase then or at q4 results...or later ?
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#53 Ms Jet

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Posted 16 September 2018 - 09:35 AM

Thanks a lot for the thorough response...ill hold on to mine then
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#54 JK001

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Posted 15 September 2018 - 07:12 PM

Is this share likely increase in next 6th months...any guesses as to what? Is it in trouble? Thanks

 

Jet, why i believe the answer is yes.  Firstly R360 million of CellC loss was due to forex.  Now you could argue that the rand declined against the dollar and yes that affects companies that does not do hedging (buying currency upfront at an agreed rate).  The Levy brothers helped to reduce the R1 Billion anticipated loss by R 400 million to R600 Million.  So, let's say they improve it with only another R 300 million and have R 300 million less currency losses CellC would be profitable by maybe as soon as Feb next year.

 

They rolled out fibre to 16000 houses in one year.  Massive uncap demand for data - fibre is mostly subscription based and uncapped data, so the price of data does not matter then.  

 

They enlisted 64 mobile virtual network operators including FNB that is quoted below that Telkom and CellC should merge.  Funny how this guy from FNB is questioning FNBs strategy to become a MVNO (by implication).   

 

You cannot compare them to MTN, Telkom and Vodacom as theirs are different strategies.    

 

Fact is the commodity (airtime and data) they sell is not tangible or manufactured in a factory.  It is measured by the time and capacity of using technology infrastructure. They have an infrastructure agreement with MTN and with 2 internet service providers.  So, all this talk about CellC that will actually just be fine.

 

Now, lets look at BLU before CellC. BLU share price was more than R20 a share. That business is still as solid as it was and the massive capex spent on infrastructure in Mexico and India is almost paid off. 

 

If you take a 50% discount for doubt and investor jittery (lack of understanding tech) then R9-10 a share is not unrealistic.

 

I always like to see if the execs believe in their own company, so I look at the SENSE and see if they personally buy their own company shares.  They are.


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#55 Ms Jet

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Posted 15 September 2018 - 09:58 AM

Is this share likely increase in next 6th months...any guesses as to what? Is it in trouble? Thanks
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#56 realkingkam

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Posted 14 September 2018 - 01:55 PM

You don't (compete). Hence why the merging of Telkom and CellC is a necessity according to some.

That would be fantastic . Problem is the rhetoric of BLU Cleary indicates they have no interest in such. Not a share I'm willing to invest in personally at this stage . .
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#57 Spell Jammer

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Posted 14 September 2018 - 11:12 AM

Wow ... how do you compete ! The question then remains what is cell C good for ... top end covered .. lower end covered .. cell C ya later if they don't come up with something fast

You don't (compete). Hence why the merging of Telkom and CellC is a necessity according to some.

 

 

 

Telkom and Cell C will not survive unless they merge – Analyst Telkom-logo-phone-in-hand.jpg
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Cell C and Telkom Mobile face tremendous challenges in South Africa and will not survive unless they merge.

This is according to Wayne McCurrie from FNB Wealth and Investments, who said that scale is needed to survive in an increasingly-difficult mobile telecoms market.

Speaking to Business Day TV, McCurrie said the golden age of the mobile telecoms industry is over – and only the strong will now survive.

“A decade ago, this was a strong growth area and you could not go wrong to invest in the cellular operators,” he said.

However, times have changed and companies like Vodacom, MTN, Cell C, and Telkom Mobile now face serious challenges. These include:

  • There is relatively stagnant top-line growth in the mobile industry.
  • Voice minutes are declining, and that is where most of the margin sits.
  • Data volumes are increasing, but data prices are coming down.
  • Mobile operators are under pressure from regulators to bring prices down.
  • Operators have to invest large amounts to stay up to date with the latest technologies.
  • Increased competition means you have to cut prices to stay competitive, which shrinks margins.

McCurrie said the only survivors are the “big dogs” – Vodacom and MTN – because they have the scale to generate positive cashflows.

He explained that MTN also tried to compensate for this declining growth by entering high-risk countries which offered opportunities.

This strategy provided its own unique challenges, which was illustrated by the company’s woes in Nigeria and Iran.

ANC continues its pressure on data prices

The pressure on mobile operators is clearly illustrated by the recent calls from the ANC to drop mobile data prices.

The ANC raised concerns about the negative impact that the high cost of data has on South Africans.

In a statement, the party said the high costs of data see most people unable to enjoy the benefits of the digital economy.

“The ANC believes that lowering the cost of data will be a catalyst for economic growth. It will unlock economic opportunities and thus contribute to economic growth,” it said.

“The mobile operators must demonstrate goodwill and lower data prices and allow government to resolve the allocation of new spectrum.”

Share prices decline

The impact of the tough market on mobile operators is evident in their share price, too, as shown below.

Vodacom, MTN, Telkom, and Blue Label Telecom (a large Cell C shareholder) have all experienced sharp drops in the past year.

Blue Label Telecoms (-44%)

Blue-Label.jpg

Vodacom (-30%)

Vodacom.jpg

Telkom (-24%)

Telkom-1.jpg

MTN (-15%)

MTN.jpg

 

Edited by Spell Jammer, 14 September 2018 - 11:14 AM.

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#58 realkingkam

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Posted 13 September 2018 - 08:09 PM

We are price sensitive but you need to get value out of the products that you consume too. An example, prior to the WASP roaming agreement with MTN I would wager that rural mobile connectivity on the Cell C network was pitiful at best. Fibre to the home at current prices is also still a largely affordable luxury for the majority of South Africans unless they are targeting township areas with a serious economies of scale costing model to drive Fibre costs down to R99 per month for uncapped Fibre like these guys are doing.

https://mybroadband....s-started.html
^^I'm not convinced by the Cell C model as yet, especially if the above mentioned proves to be a hit. Neither does the Black streaming model convince me once people realise that R99 per month uncapped Fibre eliminates the need for Black from a set top perspective.

Wow ... how do you compete ! The question then remains what is cell C good for ... top end covered .. lower end covered .. cell C ya later if they don't come up with something fast
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#59 Spell Jammer

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Posted 13 September 2018 - 04:46 PM

https://www.itweb.co...aYAyqoV3A3MJ38N

is south africa not a price conscious economy?

I suppose on the other hand turning the cell c module profitable will only benefit the shareholders

We are price sensitive but you need to get value out of the products that you consume too. An example, prior to the WASP roaming agreement with MTN I would wager that rural mobile connectivity on the Cell C network was pitiful at best. Fibre to the home at current prices is also still a largely affordable luxury for the majority of South Africans unless they are targeting township areas with a serious economies of scale costing model to drive Fibre costs down to R99 per month for uncapped Fibre like these guys are doing. 

https://mybroadband....s-started.html 

^^I'm not convinced by the Cell C model as yet, especially if the above mentioned proves to be a hit. Neither does the Black streaming model convince me once people realise that R99 per month uncapped Fibre eliminates the need for Black from a set top perspective.

 


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#60 realkingkam

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Posted 13 September 2018 - 02:36 PM

https://www.itweb.co...aYAyqoV3A3MJ38N

is south africa not a price conscious economy?

I suppose on the other hand turning the cell c module profitable will only benefit the shareholders
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