South Africa’s Blue Label Telecom to buy mobile device supplier

PUBLISHED: Tue, 27 Jun 2017 12:21:08 GMT

South African telecommunications firm Blue Label Telecoms said on Tuesday it would buy a mobile device supplier for 1.9 billion rand ($148 million) to expand its existing business in that field.

Blue Label, the largest distributor of pre-paid voice and data airtime in South Africa, said it would buy shares in unlisted 3G Mobile Proprietary Limited in two stages with its subsidiary, The Prepaid Company Proprietary, initially acquiring 47.37 percent for 900 million rand followed by 52.63 percent to be acquired for 1 billion rand.

Blue Label said 3G Mobile would be used to expand into the financing and supply of mobile devices, handsets and allied products to distribute into the low cost smartphone market.

“Both of these functions supplement Blue Label’s strategic objectives to provide value added services to both Cell C and its own customer base. 3G Mobile provides the ideal platform to consolidate Blue Label’s low cost and certified pre-owned mobile handset divisions into a consolidated group,” the company said in a statement.

South Africa’s third largest mobile phone company, Cell C, and its creditors agreed a deal where Blue Label would pay 5.5 billion rand for a 45 percent stake in the debt-laden mobile firm.

The deal will give Blue Label a share of profits on a product it distributes as well as a major stake in a company facing a consumer backlash due to slow network speeds.

3G Mobile, which is one of Africa’s largest distributors, and financiers, of mobile devices and handsets, operates in 8 African countries.

By 0758 GMT, shares in Blue Label were treading water at 15.15 rand following the announcement.

($1 = 12.8401 rand)

(Reporting by Tanisha Heiberg; Editing by Mark Potter)

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