In this episode of ITWeb TV, Blu Label joint CEOs, Mark and Brett Levy reflect on building the company from car radios and prepaid vouchers to a diversified technology giant, while discussing Cell C’s turnaround, entrepreneurship, energy ambitions, leadership lessons and South Africa’s digital future. #CellC #Entrepreneurship #JSE
Blu Label Unlimited, the majority shareholder in South Africa’s fourth-biggest mobile operator Cell C, is looking to significantly reduce its stake in the telco.
This was revealed in an ITWeb TV interview with Mark and Brett Levy, the joint-CEOs of Blu Label Unlimited, which recently rebranded from Blue Label Telecoms.
Blu Label Unlimited holds a 53.57% stake in Cell C through its subsidiary, The Prepaid Company. It gradually increased its shareholding, and until September last year, it held 49.5% of the mobile operator.
During the interview, the Levys reflected on the company’s journey from selling car radios and prepaid vouchers from a car boot, to building a diversified fintech and energy business.
They discussed the evolution of prepaid and digital payments, the turnaround of Cell C through a capex-light strategy and debt restructuring, as well as lessons learnt from the R5.5 billion write-down in the telco.
The brothers also outlined Blu Label’s ambitions in energy, including revenue assurance, smart metering and green energy projects. They highlighted the growing role of data and AI, while emphasising resilience, entrepreneurship and long-term growth.
Blu Label Unlimited joint-CEOs Mark and Brett Levy. (Photograph by Lesley Moyo)
Blu Label’s R5.5 billion investment in Cell C became one of the most defining and challenging chapters in the company’s history. The group invested in South Africa’s fourth-largest mobile operator in 2017, believing it could play a bigger role across the telecommunications value chain and help turn Cell C into a stronger challenger brand.
However, the investment quickly came under pressure as Cell C battled heavy debt, operational challenges and intense competition in the mobile market. By the end of 2018, Blu Label had written down the full value of its investment, resulting in a R5.5 billion impairment that severely impacted shareholder value and sent the company’s share price tumbling.
The Levys admitted the company “backed the wrong jockeys” in the early years, despite believing Cell C was the right asset.
Blu Label’s share price since the listing.
The brothers said the turnaround only gained momentum after a new management team led by CEO Jorge Mendes adopted a capital-light strategy focused on infrastructure sharing and operational efficiency.
Blu Label also played a central role in restructuring Cell C’s balance sheet, including converting debt into equity ahead of the operator’s JSE listing in late 2025.
According to the Levys, about 98% of Cell C’s debt was eliminated through the process, putting the business on a more sustainable footing.
Despite the setbacks, the brothers said they do not regret the investment, describing it as a lesson in resilience, transparency and long-term thinking.
“From inception, we believed in influencing the entire ecosystem – from manufacturer and distributor to the end-user. In theory, if you could own every product you produced within your ecosystem, that would be ideal,” said Mark.
“When Cell C came about, we did extensive work and brought in experts from around the world because those skill sets did not exist in South Africa at the time. We wanted to determine whether it was worth investing such a significant part of our lives into the business. People may criticise the decision, but as the largest shareholders, any mistake or success has a material impact on our lives. Everything we did was for the right reasons.”
In hindsight, Mark noted the investment was, unfortunately, shareholder-destructive because Blu Label failed on execution.
“It reinforces a simple lesson in business: management matters. We suffered the consequences of backing the wrong team to lead what we believed was an incredible asset.
“It took many years of trials and tribulations before we found the right leadership team. Jorge [Mendes, Cell C CEO] and his team have fundamentally changed the outcome of this asset. What is happening at Cell C today is aligned with the vision and dream we had when we acquired it in 2017.”
He said there is a niche for Cell C, and the company has successfully carved out that niche. “The reality is that Blu Label has very little to do with the day-to-day operations of Cell C. We have a commercial relationship with Cell C, just as we do with the other network operators. We also do not have a seat at the table or operational control. We are, however, a significant shareholder and naturally want to see the business succeed.
“What we are most proud of is that we stayed the course during an extremely difficult period. The team made it work. If there is one lesson to take from this journey, it is the importance of resilience, entrepreneurship, creativity and the ability to weather storms. I believe 99% of people would have run for cover, but two Delmas boys stayed in, we went head-first into the fire.
“Cell C is now on the right trajectory and moving in the right direction. At this point, it is about letting Cell C do what it does best, while Blu Label focuses on its own path. That is also why the word ‘Unlimited’ is important for us – it separates us from being seen purely as part of the telco universe.”
Cell C’s all-time share price.
Said Brett: “Ultimately, we do not want to own 49% of Cell C forever. Ideally, we would like to reduce that stake to somewhere between 20% and 30%. We still believe Cell C has strong growth potential, but over the next two to three years, we would rather unlock value from that investment and redeploy the cash into Blu Label’s core business, dividends and other growth opportunities.”
He noted that, looking at the strategy over the next few years, “there is significant cash that can flow back into Blu Label from Cell C, alongside the performance of our existing operations”.
He added that the turnaround has brought a new sense of stability to the business. “What this has really given us is a sense of calm. In the past, everything felt either fantastic or terrible, but now the business is in a much more stable position. We can come to work, focus properly on strategy, motivate our teams and concentrate on building the business for the right reasons, instead of constantly firefighting.”
Brett also expressed optimism about the medium-term outlook, saying: “I am genuinely excited about the next 24, 36, 48 and even 60 months. We are entering a period where we can focus on long-term growth from a position of stability and confidence.”
On the company’s financial restructuring, he explained: “We effectively reduced the [Cell C] debt to almost zero through a debt-for-equity swap. Before the listing, Blue Label acquired about 95% to 98% of the debt and then converted that debt into equity when the company listed.
“As a result, roughly 98% of the debt was eliminated at listing, leaving Cell C with minimal to no debt on its balance sheet. The business is now on its own journey, which is one of the biggest reasons we can feel confident about its future.”
Brett noted that from 1 June, the group expects to publish its first “clean” set of results in eight years, covering Blu Label and Cell C separately.
This will provide the market with clearer financial visibility and allow for a more accurate valuation of both businesses, he said. He added that this could mark a turning point for re-rating, as the market would finally be able to properly assess Cell C and Blu Label.
He also expressed confidence that the worst of the valuation pressure is now behind the group.
Blu Label says it effectively reduced Cell C’s debt to almost zero through a debt-for-equity swap.
Earlier this year, Blu Label Unlimited subsidiary BluEnergy was granted a multi-year energy trading licence by the National Energy Regulator of South Africa (NERSA).
Mark said BlueEnergy’s recent licence from NERSA strengthens the company’s role in South Africa’s electricity ecosystem, where the group has long enabled prepaid electricity vending through its Cigicell business.
He explained that the group already manages a large share of electricity distribution across municipalities, but margins are declining, prompting a shift towards new revenue streams. This includes government-awarded initiatives such as smart meter rollouts and a “revenue assurance” model aimed at recovering an estimated 30% of lost or stolen electricity in municipalities.
Mark said Blue Label is working with municipalities on a “no-risk” basis, only earning a share of recovered revenue, while also supporting employment and improving municipal cash flow and service delivery.
He added that BlueEnergy will focus on developing smaller, decentralised green energy plants (10MW to 30MW) that connect directly into municipal grids, complementing Eskom rather than replacing it. The goal is faster deployment, lower costs and additional capacity to meet rising long-term electricity demand.
He also confirmed the group has a national trading licence, positioning Blu Label as an integrated electricity “one-stop shop” spanning vending, metering, revenue recovery generation and trading.
