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Cell C upbeat despite ratings blow

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Cell C remains upbeat, despite the news on Friday that ratings agency Standard & Poor’s has downgraded its credit rating for the second time this year. 

Standard & Poor's lowered Cell C's long-term corporate credit rating from B to B- from B, giving the cellular network operator a negative outlook.
Earlier in the year, it had dropped the company from a B+ to a B, while Moody's also came in with a downgraded rating.
However, Cell  C remains upbeat about its improving performance  and  prospects  in  spite of last week's bad rating.
CEO Jeffrey Hedberg says the view expressed by Standard & Poor’s  about  Cell  C‘s ability to grow into its capital structure is unfortunate because the company continues to make significant progress.
“Year-on-year  growth  in  EBITDA  rose  by  47%  and  for  the  quarter to end-September by 71%. We’ve seen strong growth during the first nine months of  the  year. This trend continues and we look forward to sharing our full results with the market in April 2008," he says.
“Naturally,  rating  agencies  need to apply independent standards to their assessments.  However,  cash  flow  is  strong  and  we  have the continued commitment  of our major shareholder. We therefore remain very confident in the  future of Cell C and our ability to continue on an upward trajectory."
During  the  three  months  to  30  September  2007,  Cell  C  connected 1,345-million  prepaid  subscribers – categorised  as 48 000 post-paid, 36 000
ControlChat (84 000 combined) and 13 000 CSTs, bringing the total number of subscribers to 4,2-million.
Total revenue rose by 17% while EBITDA, excluding Virgin Mobile South Africa and gains from mobile number portability, increased by 71% over the third quarter of 2006.
The  improvement  in the company’s performance was underpinned by growth in the  subscriber  base and consequent increases in airtime sales, access and interconnect revenues, says Hedberg.
Zeona  Motshabi,  Cell  C’s  chief  corporate  officer, says the turnaround strategy implemented over the past year is paying off.
“We remain confident about developments in the regulatory environment which we  believe  are  starting to level the playing field for a late entrant to the market such as ourselves.
“With   market  share,  performance  and  the  regulatory  environment  all improving, we are confident and positive about prospects in 2008,” Motshabi adds.