After the Cell C divorce, Blu Label is making a play for electricity

Cell C is out. Electricity is in for Blu Label

Blu Label, the South African digital distribution group, built its business around airtime, vouchers and payments before making a major push into telecoms through Cell C. Now, it is moving into a much bigger infrastructure market: electricity.

The company is positioning Blu Energy, its energy unit, across the electricity value chain, from trading and wheeling power to renewable generation, battery storage, and municipal billing. In February 2026, it was granted a multi-year electricity trading licence from the National Energy Regulator of South Africa (NERSA) and says it has identified about 400MW of potential capacity, with plans to deploy up to 180MW in the near term.

Blu Label wants to use the payments, vending and municipal infrastructure it has built over decades to become a middleman between power producers, municipalities and large electricity users.

“We have got trading, we’ve got wheeling, and then the bigger concentration for us is how do we start deploying green energy on this side of the municipal grid, where we plug directly into the municipal grid,” Mark Levy, Blu Label’s co-chief executive officer (CEO), told TechCabal.

He said the company plans to participate across the broader power supply chain, from trading and wheeling to “nodal production”, battery storage and dispensing power at different times of the day.

Blu Label is Cell C’s largest shareholder, owning 49.53% of the mobile operator. The company’s latest results, released on Wednesday, show that the strategy builds on an existing electricity business. Electricity revenue generated on behalf of utilities rose 11% to R24.3 billion ($1.52 billion) during the year, although commissions fell 10% to R144 million ($9 million) as margins came under pressure.

That pressure is part of why Blu Label is moving further up the electricity value chain. Levy said the company wants to capture value beyond vending commissions. It has already contracted 28MW of rooftop solar capacity, while its wider pipeline includes ground-mounted projects, with some deployments expected to begin in the third or fourth quarter of 2026.

Blu Label also sees an opportunity on the other side of the electricity equation: making sure municipalities bill and collect the money they are owed.

The company says it has deployed more than 50,000 meters and has another 10,000 to 15,000 in its pipeline. Levy described municipal revenue assurance as a “sleeping giant”, pointing to an estimated R30 billion ($1.9 billion) in revenue that is not being billed or collected correctly.

But the energy push comes as the company emerges from one of the most disruptive periods in its history, following its long and costly attempt to turn around Cell C.

The listing and restructuring of Cell C simplified the group’s balance sheet and left Blu Label with a 49.53% stake in the listed operator. It also created a major accounting hit. The Johannesburg Stock Exchange-listed group recorded a R5.19 billion ($324.4 million) net loss related to Cell C, including a R6 billion ($375 million) loss on the disposal of its investment, partly offset by an R841 million ($52.6 million) remeasurement gain.

That pushed reported Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) to a loss of R4.77 billion ($298.2 million), compared with a profit of R1.60 billion ($100 million) a year earlier. Net profit attributable to shareholders also swung to a loss of R4.88 billion ($305 million), from a profit of R2.48 billion ($155 million).

Strip out Cell C and restructuring effects, however, and the picture looks markedly different. Blu Label reported normalised revenue of R9.4 billion ($589.6 million), EBITDA of R923 million ($57.7 million) and core headline earnings of R681 million ($42.6 million).

Brett Levy, the group’s other co-CEO, said the company is now focused on using its technology and data more aggressively. He also identified data monetisation as a major opportunity, arguing that Blu Label has spent about 20 years building proprietary technology and data capabilities.

The Cell C separation gives that strategy more room to develop. Blu Label received R2.7 billion ($168.8 million) from selling down a 30% stake in Cell C, while cash and cash equivalents increased by R1.8 billion ($112.5 million).

The company’s next chapter is therefore less about rescuing a telecoms operator and more about finding new ways to monetise the infrastructure it already owns.

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