Financial services company Net1 acquired a 15 per cent stake in Cell C, South Africa’s third largest operator, a move Net1 said would help deliver a “comprehensive suite” of mobile, transacting and financial services to the country.

Net1 provides financial services aimed at the unbanked in emerging and developed markets. Its corporate strategy is based on investing in, and partnering with, companies which open markets for its wider product range.

The company paid ZAR2 billion ($151 million) for its Cell C share as part of the operator’s recapitalisation, which also saw distributor Blue Label Telecoms take a 45 per cent stake. Following the long-mooted investment and restructure at the company, Cell C’s debt is reduced from ZAR19.5 billion to ZAR6 billion.

According to GSMA Intelligence estimates for Q2 2017, Cell C has more than 16.1 million connections in the country, excluding M2M. This puts it a long way behind market leader Vodacom (39.4 million) and MTN (27.8 million).

In addition to its Cell C investment, Net1 also acquired a 45 per cent share in South Africa-based telecoms wholesaler DNI for ZAR945 million.

Net1 CEO Herman Kotze said: “Our technology, products and logistical capabilities, together with Cell C’s innovative mobile competencies and customer base, and DNI’s distribution network provide an ideal opportunity to deliver a comprehensive suite of mobile, transacting and financial services to a large part of the South African population.”

South Africa proved a difficult environment for mobile money services for the unbanked in the past, with both Vodacom and MTN scrapping their respective services during 2016 citing a lack of commercial viability.