1. PORTFOLIO COMIITTEE ON SMALL BUSINESS DEVELOPMENT
11 November 2016
PRESENTATION TO
PORTFOLIO COMIITTEE ON SMALL BUSINESS DEVELOPMENT
11 November 2016
economic transformation policies biased to small, medium and micro enterprises (smme’s) and co-operatives

2. Cell C Delegation Mr. Sherhaad Kajee Chief Procurement Officer
Mr. Joshua Moela
Managing Executive: Government Relations

3. overview
In July 2001 Saudi Oger commenced operations when it originally established a 60/40 joint venture with a black economic empowerment (“BEE”) consortium, CellSAf, it commenced commercial operations in November 2001 (as the third entrant in the South African market).
Currently busy with a re-capitalisation of it’s business which will result in shareholder change, Cell C will be majority South African owned and the Black Ownership will increase from the current 25% to 30%
Cell C’s current BBBEE status is a level 3 and their current certificate is valid until 10 July 2017
Cell C spent R on Qualifying Small and Exempted Micro Enterprises during the 2015 Financial year

4. Procurement Policies
The Cell C Procurement Policy has favourable payment terms;
BBBEE EME and QSE Companies that are 30% Black woman owned and/or more than 50% black owned are paid within 14 days of invoice

5. Top 20 suppliers 2015 1 Huawei Technologies Africa (Pty) Ltd
Network Equipment 2
Comm Equipment
Handsets 3
Samsung Electronics 4
Apple Distribution International 5
The Media Shop (Pty) Ltd
Media Buying 6
ZTE Corporation 7
ZTE Corporation South Africa (Pty) Ltd 8
Nokia Sales International Oy 9
Huawei Device Hong Kong Co Ltd 10
Blackberry UK Limited 11
LG Electronics SA (Pty) Ltd 12
AG Cellular 13
Morpho Cards SA (Pty) Ltd
Sim Cards 14
Merchants (Pty) Ltd
Call Centre 15
Hellocomputer (Pty) Ltd
Advertising 16
Mobicell 17
RAM Transport (SA) (Pty) Ltd
Distribution 18
Pure Distribution (Sony) 19
Quest Staffing Solutions (Pty) Ltd 20
Independent Communications Authority of South Africa ICASA
Regulation

6. category breakdown of Top 20 suppliers 2015
Network
33%
Handsets
41%
Advertising 5%
Icasa 1%
Sim Cards
Call Centre 2%
Distribution
83%

7. Community services terminals
Cell C’s CSTS Obligations Surpassed
Cell C’s original obligations was to roll out CSTs.
Cell C far exceeded its target, with over CSTs having been deployed due to market changes (Reduction of retail mobile tariffs) This program has ceased to be commercial viable and as of end October 2016, there are only 7099 CST’s active.
Our current obligations have been amended to include connecting schools with tablets, routers, trolleys, projectors etc. We have rolled out 400 schools year to date by end 2016 we will have done 600 at a cost of R78 Million and are planning another 300 by March 2017 at a cost of R39 Million.

8. Pre paid distribution
35% of Cell C’s mobile revenue comes from the informal sector and this is distributed through six wholesalers who in turn empower thousands of agents who are on average earning between R2000 and R3000 per month
Distributors:
DNI agents
Telestream 3000 agents
Worldstream
Awesim
Likeminds 1800 agents
Maxcell agents

9. In 2017 we are looking at increasing our distributor base
Pre paid distribution
Our distributors also distribute to spaza’s contributing to the spaza revenue stream
Our distributors offer the agents full back office, IT Support, Marketing Support, Training and mentoring.
In 2017 we are looking at increasing our distributor base

10. Franchise distribution channel
178 out of 195 Cell C shops are franchised
39 Franchises 42% white owned
58% Black owned
Year
Rental Support % 80% 50% 30% 85%
Pay for Store Build (R1.2 Million)
Full Training
Rental Support R21 Million per annum