Blu Label Unlimited Group Limited (BLU) Earnings Call Transcript & Summary

Good afternoon, everybody. And how are you? Ready to be doing it on Zoom and not in person. Hopefully, in time, Dean, Mark and I will be able to have more eye-to-eye contact with all of you and obviously, as things turn in, things are back to normal. So let me just set the tone for today. Thank you all for joining. I'm not quite sure at the moment who's on and who is not on, but thank you all for joining. I think just to set the tone for today, just so that you know exactly what we are here to do. Obviously, pre the Cell C recap, we were getting an immense amount of questions around Blue Label, how it would look post the recap. And of course, Cell C, what Cell C would look like post the recap and I think more importantly, what the strategy of Blue Label was in putting more money into Cell C. I think it was a big question on everybody's mind, was Blue Label doing it for the right reasons, the wrong reasons and really what was the thinking behind it. And we stood fast with a set tone to all of you, which was we really didn't want to talk pre the recap. We wanted to make sure that the recap went through. And that post the recap that we promised that we would engage with the market more and that we would engage with you on the questions that you all had and that's where we find ourselves here today. So just to tell you why, what we've called for, it's really a investor update to give you a nice indication of where we are as Blue Label, to present to you exactly where we stand from a Blue Label point of view post a recap from your questions. It is obviously to take you through the strategy, how we see it of Cell C, and why we reinvested into Cell C and why we believe in it as much as we do and why we think it is a good reinvestment. It is going to touch on nice big announcement that you all would have read about 2 or 3 weeks ago, which is the launch of the Capitec MVNO, which was and is in line entirely with our new strategy. So look forward to touching base on not only the strategy, but around Capitec as well with you. And then, of course, trying to take you through a lot of your questions on Cell C, a lot of them I'll be able to take you through immediately. A lot is still a bit of work-in-progress from Cell C. And so we hope to have another closeout call of this nature before the 30th of November, as you know, 30th of November is our year-end. So we'll have another closeout call before it. So I hope we get through your questions, and I hope we get through at least what we think is on everybody's mind and touch bases and try to communicate more with you as promised. So let me just start off as a whole. I'll separate Blue Label and Cell C. So just from a Blue Label point of view, obviously, we are 5 months through the year. We're basically at half year. So we have a very good indication of how our half year is looking. I know that we indicated to you that we were looking to have more of the same from last year. As you know, last year, we had a really good year, and we indicated to you that we saw no slowdown. Proud to tell you that the 6 months is really looking strong. It doesn't mean it's easy out there. It doesn't mean we're ignorant to what's going on in South Africa and the challenges it faces. But we are having a really solid 6 months, I think, very much in line with our indications to you. And I think what's more exciting is really what the future looks like for Blue Label. So the 6 months is the 6 months, but as we indicated to you what the next 24 to 36 months look like what we have in the pipeline, our initiatives, obviously, our back to basics as we spoke to you about it, fixing our balance sheet and so on and so forth. So just as a overview of Blue Label and the questions, happy to touch on more, but yes, having a really, really solid 6 months. Then moving on to Cell C. Well, no, don't change the slide here. Moving on to Cell C is -- so I kind of expressed to you the 3 years we went through. We actually started the process just to tell you what we have that in August of 2019, the final recap went through in October of 2022. It literally took us over 3 years to do it. I know there have been many questions why, what took so long, wrong dates. One day, we'll all sit down together, we'll try to explain to you the complexity of dealing with 2 Chinese vendors, 2 Chinese banks, Lebanese -- 2 Lebanese banks, Lebanese bondholders, American bondholders, American hedge funds, bondholders out of Ireland and America, South African banks and quite frankly, you're trying to get 13 different institutions to all agree on the same deal. They have different mandates, people have different cultures. And I think naturally, 90% or 95% of recaps of this nature actually fail. It's just my direct opinion and they fail because of the complexity of it. We never gave up on it. We went for it from day 1. It wasn't easy. It was extremely difficult, but we pursued and we are very proud that this recap is done. So the recap is obviously officially done. Money has been fully paid over. Everyone is happy or satisfied at least with the deal that was complete. And it now gives us the chance to move on with our lives as Cell C and actually implement what we believe this company can be. So to sum it up, Cell C, in our opinion, has 5 assets and 5 really good assets. Its first asset is its brand and argumentative, for whatever reason, obviously, over the years, Cell C has spent hundreds of billions of rands on their brand, and they have a very strong brand in the market and that is, of course, their asset. The second one is that, of course, we have spectrum and all of you understand the value of spectrum now because of the auction. And what we are doing with the spectrum is a really big asset for us and I'll touch on that. The third one is cess loss, and of course, now that we are trading and now that we will be profitable, obviously, we now get the ability to use the cess loss of around ZAR 8 billion. Obviously, it's not like the cost we've now, you have to at least pay 20% of your tax, no problem. So we're in for 20% of the tax. But obviously, we'll be saving 80% of it. And that, of course, has billions and billions of rands of [indiscernible] going forward. The fourth one is what we call the engine. That is the prepaid engine. That's the engine that everyone is talking about. That's the one that everyone says, what are you going to do Telkom were doing X, Vodacom were doing Y and doing this. It's flooded, it's overtraded X, Y, and Z. We have a very clear strategy and I wanted to reiterate this clear strategy, right. We are not getting into dogfights. We are not going price -- we're not going into any war with any networks, right? Our price is very competitive as it is. It is very good for the consumer out there. Our price has always been a little bit better. It's what it is. What we're doing is as we transition off our network onto MTN and as you know, we're already over 70% transitioned and over 8,000 base stations, naturally to our core base and we have a strong core base, right, we are now able to offer them 4 and 5G capability. We're able to offer them a much better network. So what we've seen is a natural increase in our ARPU to our core base, nothing huge. But what we've seen by obviously having good product, obviously having good service and our product must improve right and must keep up with it, but it's a product point of view and not a price point of view. We will naturally see an increase in ARPU just simply because we have a client base that now has the ability to use 4 and 5G. And it's a very clear strategy from us. The second part of the strategy of the engine is we're now able to exist in areas where we never had coverage. And now not only don't we not have coverage, but we obviously now have 4 and 5G coverage. So we're now able to use the brand that we have and go into areas where we've never existed before, literally had 0% to 1% market share, putting time and effort, putting distribution into these areas and able to get a small share, right, from what our brand can offer and what we can do, and that's the growth we're looking for. I mean, we're not looking for these silly double-digit numbers that have been thrown out in the past. We're looking to take the core to manufacture this core to make sure that our actual core uses more by having the ability to have a better network with 4 and 5G and naturally go to areas where we've never existed before and now offer 4 and 5G and grow a little bit of our market share there. And that is the engine. That is what we're after. We will deliver product into it. We will have pricing in it. And it's a very different marketplace for us to play in. It's not a dogfight, and we are not being unrealistic on our growth patterns in this area and actually very different to the other networks, we're actually looking forward to what we're doing in this area. And the fifth asset is the one where we have a very nice niche. It's one that we are focused on. It's the MVNO market. MVNO as what you know of them today are very, very different to what you knew of them a year or 2 ago and very different from 10 years ago. There is a definite place for MVNOs in the world. There is a definite place for MVNOs in South Africa. As you're aware, about 3 weeks ago, we announced the MVNO with Capitec Bank. We all know what Capitec is capable of. We all know how many customers Capitec have. We all know the service that Capitec does. We all know the brand of Capitec. And we all know that banks want to become telcos, and we all know that telcos want to become banks. So I think I said it to each of you, it's a space worth watching as a whole with MVNOs. It's a space with -- worth watching with Capitec specifically. We've got another 2 or 3 in the pipeline that will be announced shortly. And the MVNO space-wise is a great space. It's really good margin. We have a great system. It's run by very few people. Obviously, the engine covers a lot of the expenses and where the heart of everything runs. And it gives us the ability to take this really good engine that we have, this really good system that we have and really find a nice niche in the market. And that's what we're doing. We understand our strategy clearly. There is a place for Cell C in South Africa. We understand our place in this market and we are going to execute on this. And I think that is the important note to send to you. We are not doing this because we felt like reinvesting. We're not doing it because we want to get into the dogfight. We are not doing it to work out what we want to do. We understand very clearly what we want to do. We understand very clearly where we can play and who we can play with. And I think it's going to be very interesting for us because we're looking forward to the next 24 months of Cell C in this market and what we're going to do. We find ourselves, I think, in a very different space to the other networks because sadly from where we've come from, we've obviously come from a very unsuccessful place. And the next 24 months should be exciting. In sales, it's obviously not clear sailing. It's obviously not going to be a slam dunk. I'm not suggesting that at all. But what I am suggesting is that the first time we thought the first time we understood it, but obviously we had got it wrong. We understand very clearly what our strategy is. We have great management. We have a great strategy in the 5 assets that I told you about. We will build on our management team. We will build around them. And for the first time, we know where to play, we know how to play and we are going to execute in the area where we know we can make a difference to the consumer and to Cell C. So for us, it's a little bit different because the hard part for us was this recap and now let's see what we produce from here. Okay. Moving on. A lot of questions are what does Blue Label look like, right? And I'll just take you through the slides because I think it's very important, obviously. So we've given you an indication, by the way, after this, we will post it on our website so that, of course, you can have access to it. So if there's anything that you miss or you don't miss, it's really now spelled out very clearly to you from a Blue Label perspective, what we look like pre the investment and of course, post the recap. We've broken it down into the secured lenders for you, exactly what it looked like before. So what we explained to you is there was a debt of ZAR 7.3 billion, as you're all aware, was 100% of the debt. ZAR 5.7 billion of it was the ICA lenders that were getting paid out and ZAR 1.6 billion of it was what we call the reinvesting ICA lenders, namely, obviously, Nedbank and Gramercy, right. So we've broken it down from what actually was the ICA lenders going out. So you would see that the ZAR 1.143 billion was a ZAR 0.20 -- ZAR 1.1 billion was the ZAR 0.20 paid out to the non-reinvesting ICA lenders and the ZAR 318 million that was paid to the reinvesting ICA lenders, obviously, so very clear for you to now see the breakdown of it. What you will then see is obviously the reinvestment of the ICA lenders of the ZAR 318 million. And from the TPC, the prepaid company's new money broken it down into the 2 tranches for you, which is the ZAR 1.032 billion and ZAR 111 million, which obviously gives us a total of the ZAR 1.1 billion and the ZAR 380 million from the reinvesting will then balance back to your number of the ZAR 1.462 billion, which is the ZAR 0.20 in the rand. This is where I think a bit of confusion has come in. What then happens is both us, Nedbank and Gramercy, reinvest the money back into Cell C at a 2.75% uplift. So ZAR 1.032 billion goes to ZAR 2.840 billion. Our ZAR 111 million goes to ZAR 305 million. Obviously, they're matching to the ZAR 3.1 billion that you've seen. And of course, from Nedbank and Gramercy side, you would have seen the ZAR 318 million gets reinvested at ZAR 880 million, which gives Cell C a total debt of this in this specific category of ZAR 4 billion. Okay. I'll just wait for everyone to digest that a little bit. Right. What we have also then put for you is that the first tranche of capital payments, right, which is the ZAR 1.032 billion and the ZAR 305 million, the ZAR 1.338 billion plus the ZAR 875 million and the second tranche of capital payments. So what you basically see is the first amount of money that gets paid back. I'll actually take you through on another slide where it's easier to explain. I think what's been asked to us, of course, is what is the interest rate margin. So just so that you know on a Blue Label perspective, right, you have 0 interest from month 1 to month 24. Then from month 25 to 42, there is a interest rate of 10% charged. And then from month 43 to 66, there's a interest rate of prime plus 3%. But as you can see, there's a tranche and they pay us back. So in month 42, they pay us back x amount of money. And then, of course, the remaining amount of money that is still reinvested, right, is then charged at prime plus 3%, which is paid at month 66. So the 2 -- the task, the 2 occasions at Blue Label, we paid back their money is on month 42, whether we paid back ZAR 1.8 billion…

ZAR 1.4 billion.

ZAR 1.4 billion, sorry.

In month 66.

And then in month 66, ZAR 1.807 billion. So there's the interest rates for you. That's how we charge them out, and that is our repayment structure from Cell C itself. This is how the debt funding looked like or will look like. We wanted to show it to you, right.

Can I just make one comment? So I think this is the point where the substance where we say our debt is ZAR 3.1 billion, that is the legal former debt is ZAR 3 point billion -- our loan is ZAR 3.1 billion that will be repaid. But in terms of IFRS, the loans are recognized on day 1 at the transaction price, but the delta to the capital amount, the delta of that ZAR 2 billion is recognized as interest income over the term of the loan, applying the effective interest rate. So from this slide, you can see we've done it in our financial year-end. The ZAR 1.143 billion was the amount we showed on the previous spot on day 1. That will then have an interest multiplies, you'll see interest accrued based on the ZAR 2.75 billion. So that ZAR 2 billion that takes the ZAR 1.143 billion to the ZAR 3.1 billion, the ZAR 2 billion will be recognized over the 66 months. And then if you look at the line, interest accrued on the capital amount, that is the normal interest that Brett spoke about, whereby in the first 2 years, it's interest holiday, so there's no interest you can see that we receive. And thereafter, between 24 and 42 months, we'll receive the 10% and thereafter from 43 to 66, we received a prime plus 3%, which is shown in the interest accrued on capital balances. And then you'll see the interest paid in each year as it gets paid out. And lastly, the capital payments received that Brett mentioned on the first slide of the ZAR 1.3 billion and the ZAR 1.8 billion, which will ultimately be our loan over the 66 months, which will then be fully repaid.

Thank you, Dean. So in essence, we bring in it, as you can see and you'll pull in, if you can't see it. It comes in at the end of '23, '24 at the ZAR 1 billion x amount. Obviously, the interest accrued to take it all the way up to the ZAR 3.1 billion mark. So that's how you get to the same ZAR 3.145 billion. So I've given you a nice illustration exactly what it looks like on a yearly basis. Obviously, then below that, as Dean says, we're bringing in the interest received on the capital. So separate to the interest of the ZAR 3.1 billion, which is around ZAR 900 million over and above the ZAR 3.1 billion, and then obviously, exactly how we paid back and when we're expecting to be paid back. Another big question that was asked towards us -- to us, sorry. Okay. This slide, I'm going to leave in for you to have a look at what we have broken down. It's a summary of what I and Dean have spoken about. But what we have added into the slide is the reinvesting ICA lenders so that you can see what happens on their side and of course, how they -- the interest that they receive and of course, how they get paid back. Just as a overriding thing on the interest -- on our side, as we said, there's interest for 24 months and then explain what happens afterwards. On the side of the ICA lenders, i.e., Nedbank and Gramercy, there's a 5% pick so for year 1 and a 5% pick for year 2. So the interest rate effectively that they charge in year 1 is 5%. However, no cash flows in year 1. Cash starts to only flow to them in -- from month 13, and it's again at a 5% pick for year 2. And then the interest rate is identical to ours from month 24 onwards. So the only interest that Cell C is paying on the ZAR 4 billion debt is a 5% interest rate on ZAR 900 million of it, which is a pick, which means it gets accrued and not paid for. Okay. Next page. Okay. So obviously, what was asked to us is what is our exposure from a Blue Label perspective to Cell C. We've given you a pre-recap, so August look and then a post recap. It speaks for itself, but it's exactly what you would have seen in our SENS announcement, but we've got trade receivables post recap of around about ZAR 67 million. We've got trade or what we call the other receivables or the trade claims in Cell C of around about ZAR 118 million. And then, of course, we have CEC, which pre the recap was sitting at ZAR 1.9 billion. Obviously, our recap is at ZAR 1.1 billion. So ZAR 800 million paid back to us prior to recap. And then, of course, you have our new money that we invested of ZAR 1.032 billion and ZAR 111 million. So a very clear indication to you of our exposure now to Cell C, as clear as daylight, so you could see it. And our Cell C inventory post the deal sitting at ZAR 2.2 billion, obviously, is an asset for us. So showing you both the asset and, of course, our exposure to them post the recap.

Just one point on that. Again, as you would have seen what I explained earlier, the new money and the reinvestment interest will be shown at the ZAR 1 billion and the ZAR 111 million. But once again, that amount will grow over the 66 months to the capital amount that we said of that ZAR 3 billion, just over the ZAR 3 billion…

As the interest…

To ZAR 1.45 billion.

Correct. As the interest accrues yearly. Okay. That's just showing you what it looks like in SPV1, as we explained to you in SPV2, where we obviously bought over the notes of the ZAR 25 million and the ZAR 223 million. I'll break down the SPVs more for you a little bit later. I'm sure there will be a question. Then, of course, what did we take on and what did we do to do it. We did a third-party Airtel purchase for ZAR 217 million, as you would have seen. And we did a second loan with the banks, which we called it bank airtime repurchase of ZAR 1.7 billion. So in essence, took on -- is around number ZAR 1.7 billion of new debt. This debt is paid back monthly over 20 -- so the third time airtime repurchase is paid back monthly over 18 months in equal capital and interest repayments. So in 18 months, the ZAR 217 million no longer exists and the ZAR 1.471 billion is paid in equal payments over 24 months capital and interest. So in essence, in 24 months, it is 0. We are clearing out both of these facilities between 18 and 24 months. The source and use of our funds, right, so obviously, the source of the funds for the recapitalization, the bank gave us ZAR 1.7 billion. The third-party airtime repurchase was ZAR 250 million. Our facility A, which is the facility you've always known, which was only sitting at -- which is our main facility, ZAR 1.125 billion was increased to ZAR 1.4 billion. So obviously, an increase of ZAR 275 million, and we used ZAR 585 million of our own cash that we had on hand. So the total funds that we apply to the transaction was the ZAR 2.8 billion. Where did the ZAR 2.8 billion go? Obviously, you read the ZAR 1.2 billion of pre-purchase of stock, the ZAR 1.032 billion to the ICA lenders as we've spoken, and the ZAR 111 million to ICA lenders as we spoke. Obviously, the ZAR 25 million to the SPVs. So this is just a repeat spelling it out for you in the actual balance sheet format. Obviously, the trade teams acquired of ZAR 180 million, and the SPV full claim of ZAR 223 million. And lastly, the raise in fee on the repurchase of -- well, the raise in fee in order to do it to raise the money of ZAR 92 million is where the funds were allocated of the ZAR 2.8 billion. Just to tell you so another question that was asked to us. So the one facility, as I explained to you, is a facility that gets paid back in annual -- monthly over 18 and 24 months. We want to clear it. The second or our main facility A is the ZAR 1.4 billion, which is a 2-year facility, which obviously is like any normal facility that will come during 2 years' time. And obviously, there, we'll see if we want to increase it, decrease it, keep it. I mean it is in the normal trading rolling bank facility, which is a 2-year facility. Yes. That's exactly, sorry -- I just went ahead of the game, right? But that's exactly what I explained to you now which was the ZAR 250 million, ZAR 207 million, if you look at it, which is over 18 months. The ZAR 1.6 billion, which is ZAR 147 million payable over the 24 months. And then the 13 -- the 24 months on our main facility, are revolving facility. So exactly how I explained. It now sets out very clearly exactly what Blue Label looks like post the recap. As I said, it will be available to everybody and look forward to covering anything that we might not have covered. I do have a lot of things to cover on Cell C, not in a slide format. But I do think that there are going to be a lot of questions on Cell C. So I think better than me going through what it is, I think the main thing is just so I can touch on it just as -- it will all be the figures, of course, everyone wants to see what the shareholding percentage looks like post the deal. Obviously, everyone wants to understand what SPVs look like. You want to understand the exact debt in Cell C, the debt being not only the ICA debt that I've explained, it would then actually obviously include the CEC debt and of course, would include the lease debt. Obviously, the amount of interest that Cell C is paying, which I think I've covered now at least most of it, 95% of it. And then most importantly, of course, you want to see a balance sheet from day 1. I know that Cell C is on a road show. But obviously, their balance sheet wasn't on day 1 as they only had a look at it from the end of September. That's a balance sheet that is work-in-progress as we talk. And of course, as soon as that is ready, we will distribute it or probably even have another conference call with Cell C directly so that you will see it spread out exactly in their own day 1 balance sheet. So understand the question, just from the shareholder percentage, maybe I can touch on it because it will cover most of the questions maybe. Obviously, Blue Label at 49.5% and of course, you understand how that took place now. You have Net1 that is now at 5.1%, down from 15% from before. You have Gramercy at 6% and Nedbank at 7.5%. So just there's a round number 13.5%. Obviously, we'll give you a diagram to this exactly as well, by the way. CellSAf empowerment side, which now has a direct stake unencumbered of 3% outside of actually the empowerment of the Believe Trust that sits behind the SPVs and management -- approved for management of 2.5%, that's also unencumbered. Just on the SPV side, there is now SPV1, SPV4 and SPV5. So SPV2 and SPV3 have fallen away. SPV2 was the Chinese. Obviously, they've fallen away. And SPV3 was Nedbank, which obviously now holds the shares directly. In SVP1, you've seen our loan into SPV1 and our claims, that sits with a security there for our money to be paid back of 4% shareholding. It's just a security. Obviously, the SPV will be paid back and the shares will then go into Believe Trust. In SPV4, there's 10.5% of our claims and SVP5 is 10% security held to pay. That entire 25% belongs to the Believe Trust. So I claim these limits and only to our claim in SPV1 to 5. And of course, as soon as our claim is paid back in SPV1, 4, and 5, obviously, the shares are 100% returned to the Believe Trust. So that's from a shareholder perspective, that's from a SPV. From a debt perspective, I think what's important is I've touched on the main ICA debt, which you have seen now in detail. Obviously, over and above that debt that Cell C have is obviously the ZAR 1.1 billion that is owed to Blue Label or CEC, the ZAR 1.1 billion is at a 12% interest rate fixed and it is fixed at 60-month repayment cycle, equally over 60 months capital and interest. So that's the third part of -- second part of Cell C's borrowing over and above the ZAR 4 billion. We then have a Net1 or Lesaka as they are known today, where they have ZAR 270 million in Cell C. So it's the ZAR 4 billion plus the ZAR 1.1 billion of Cell C plus ZAR 270 million of Lesaka, of which the interest rate is at 10%. There is 0 payments from month 1 to 12. And then from month 13 to 31 in equal repayments. And then the last one, which is obviously always a very important one, which will come out in the final day 1 balance sheet is, of course, the final exposure of noncurrent and current to the leases. So if you take the ZAR 4 billion of which Blue Label is ZAR 3 billion of it, initial investment of only ZAR 1.2 billion. The other ZAR 1 billion is obviously Nedbank and Gramercy investment of ZAR 380 million is the 4. You then add on the ZAR 1.1 billion of CEC. You then add on the ZAR 270 million of Net1. And of course, the current and noncurrent of the leases, however you want to look at them as the debt to Cell C, that will give us the debt position of Cell C. So I hope that answers a lot of the questions besides the day 1 balance sheet, which I know is a absolute requirement. And of course, it's absolute requirement for us, not just for you, it's obviously, for us. And as I said, I'm sure that we will arrange as soon as it is ready. Obviously, a lot of work had to be done by Cell C and then obviously checked by SNG, the auditors. Obviously, post the recap and obviously once money flowed because there were a few changes at the end. There were a few changes to actually the leases at the end. But obviously, everything was done in the end. So let's see what it all means. So before I go to the actual webcast for the questions, I'm going to first go to Chorus Call and ask if there's any questions online.

Thank you, sir. There are no questions on the phone lines.

Okay. Excellent. So then I'm going to go to the questions on the webcast. The first question is from Ellen Emla. Hi, Ellen. You spoke about an independent audit of Cell C by one of the big 5 auditors appointed by Blue. Is this still taking place? And if so can you give us a indicated date? Ellen, 100%, so this was obviously done completely independently. And obviously, that will bring through the revaluation of Cell C in Blue Label's books, of which we will be disclosing that in our November results. Do you want to add anything, [ Zetty ]?

Yes. I just guess the auditors advised [indiscernible] of Cell C, they're currently finalizing -- in the process of finalizing their accounts. From a Blue Label perspective, as I mentioned, we are in the process of obtaining a valuation, Ernst & Young are in the process of obtaining a valuation. That valuation will then affect the net carrying value on day 1 being the end of September when the recapitalization started.

Thank you, sir. Okay. The second question is from Philip Short. In Capitec's recent presentation, Capitec said they have 8 million of their clients that buy prepaid airtime by their own digital platform, which Capitec says makes up more than 30% of the total South African prepaid market, which I put at about ZAR 17 billion. Blue current facilities, the back end of Capitec's prepaid airtime and earns approximately 1% to 2% gross margin. Over time, as Capitec moves those 8 million clients to Capitec Connect and hence on to Cell C's platform, that ZAR 17 billion will now collect a 50% to 60% gross margin at Cell C. So Blue will effectively be swapping out a 1% or 2% gross margin on that prepaid airtime of, say, around ZAR 17 billion at Blue for a 50% to 60% gross margin at Cell C. Is my understanding correct? So your understanding is 100% correct, but I just want to talk about the magnitude of the revenue. But obviously, from a Blue Label perspective, where you correct it, we only make 1% or 2%. Obviously, in the Cell C world, their margins are whatever they are between 50% or 60%. So anything that Cell C can make by MVNO to what we were making on selling airtime is a straightforward difference. We will lose the 1% or 2% and Cell C will gain the 50% to 60%, which speaks for itself the increase in the margin for us as a group. Obviously, the only thing I want to say to that is it's obviously not the whole. So Capitec as a bank will always do tremendously well in recharge vouchers outside of their own MVNO. So we see this actually quite differently. We see that the revenue of what they are currently doing interestingly will remain and grow and they will have growth over and above that by the MVNO. And I know that's very aggressive because something has to give. But let's see time played out maybe something does give, but you will definitely have a piece of both. But obviously, whatever we give up in sales, obviously, what goes to the MVNO is at a greater margin. And of course, there's a crew that is -- you can't compare the 2, right? The next one is Ziyad. Thank you for the session. Cell C is a progressive and SCS generated asset now. However, the market continues to price it at 0 or negative value in Blue. Given debt and equity hold in Blue economic value rights in Cell C is 75% to 80% plus, would it make sense to consolidate Cell C, take control and driving meaningful earnings even though accretion of Blue, which should transpire into a higher share price and shareholder value creation? Ziyad, you're spot on. We believe in this asset, right. I don't know if you were in any of the sessions with Mark and Dean and I before. We made it very clear in those sessions that the Blue Label Board must make 1 of 3 decisions post the recap. Decision 1 is remain where we are. That's not going to be a decision. So it's 1 of 2 decisions. Do we sell down? Or do we take control? And in time, we will give you that exact answer. But I think your perception of how you read it is 100% correct. Sorry, we can't talk more on that. I've got things from [ Mandy ], [ Nick ], [ Junior ], but I don't think anything has come through. So I'm just going to go to the next.

It's come through.

I put this in, but it's not come through.

That's all about connectivity.