Fin24

Neotel revamp in bid to wrest market share

2010-12-22 16:18

Johannesburg - Neotel, a unit of India's Tata Communications, said it is considering restructuring as it faces tough competition in South Africa.

Launched in 2006 after long delays, the company began offering telephone and internet services to corporate customers in March 2007, and has yet to turn a profit.

Neotel said in a statement it would consider "realignment and restructuring options". No one was immediately available to comment at Neotel.

It was not clear whether the restructuring would entail job cuts or closing down parts of the business.

Unlisted Neotel, South Africa's No.2 fixed-line operator, said it was trying to ensure it was sufficiently geared to meet the challenges of the market.

It competes for corporate clients with Telkom [JSE:TKG] , Internet Solutions - a unit of Dimension Data Holdings [JSE:DDT] , MTN Group [JSE:MTN] and Vodacom Group [JSE:VOD] business unit.

Neotel is rolling out wireless and fibre-optic networks to snatch fixed-line revenues from Telkom, which recently launched its own mobile unit.

Comments
  • Anti-Neotel - 2010-12-22 16:36

    As expected, everyone was hoping Telkom would fail, but in Telkom's strong market share, Neotel was the one who failed... They are not delivering and their management and staff are as incompetent as their business strategy... Rather close down...

  • neanderthal - 2010-12-22 16:54

    Neotel, MTN, Vodacom, Cell C = All pathetic genetic mutations of Telkom. For the high charges we pay in this country for voice and data calls, the only way to permanently get rid of these pathetic monopolistic companies is not via competition but via the lethal injection or other innovative technical means where it hurts them most i.e. in their technical infrastructure.

  • Juan - 2010-12-22 18:07

    It’s not strong competition it’s just bad service on the part of Neotel that is the problem. I jumped at the opportunity to switch to Neotel but after terrible service and slow connection speeds I cancelled my contract. They have only themselves to blame...

  • John - 2010-12-23 07:04

    Neotel being the only competition to Telkom and totally agree that bad service has lead then to under perform, Their management should be re-structure as they are incompetent. give them a second chance. My opinion

  • Timkan - 2010-12-23 07:20

    @neanderthal As your name suggests, you obviously come from a way back time. Shouldnt have used Cell C in your comment, as that is one company that against all odds, is striving to become consumer centric, competing with data prices on an adsl level, where even vodacom and mtn are out of their depth.

  • Zac - 2010-12-23 07:22

    Ditto everyone!! Neotel is 10 times worse than Telkom, was a client for 3 months. 8 calls to their service dept to sort out problems, nothing ever happened. They wanted to hold me to the 2 year contract & told them to take me to court, they still owe me R 589 since last year May. 4 Calls for them to collect their device, that they still have not done. So far it's "viva" Telkom.

  • martin albert - 2010-12-23 07:30

    As this company has failed miserably to bring competition to SA it should be closed down. All it did was get a licence and do a total about turn on delivering to the masses. Totally deserves what it gets!

  • Vusi - 2010-12-23 07:49

    Neotel should concentrate on their service offering and then the profits will look after themselves. One month ago Neotel took over the entire Transnet internet service provision. Neotel has now managed to ensure that the entire Transnet and all it's divisions (TFR, TNPA, etc.) has now been without an internet connection for the past 3 days ... and counting.

  • JC - 2010-12-23 08:07

    How can they possibly claim Telkom is strong competition? Telkom is a calamity! It looks like Neotels philosophy of ignoring the household consumer is coming back to bite them. They only have themselves to blame for leaving the door open for the cellular companies.

  • Henry - 2010-12-23 08:18

    I agree with the previous comments - Neotel as a company and the employees as service people are the cause for this failure. Incompetent! Uninterested in clients! Bad sevice! Uncooperative! If Neotel was the only option in telecoms I would be using a cleft stick!

  • seelan - 2010-12-23 08:28

    i applied for a neotel phone (residential) and was declined, which i find hard to believe because my credit record is 100% clean and my income is more than adequate to meet the neotel lite 199 rate. The neotel business strategy is badly flawed together with a large number of incompetent staff who turn new customers away by declining new applications who have clean credit records, myself included.

  • John - 2010-12-23 09:11

    POOR service. Tried to get a line at work and at home. Bad signal, long delays in installation. Forcing long contract periods. It is pathetic. Cancelled everything. Could not wait for Telkom competition and now that is here it only makes Telkom look good (which it is not). Their whole Board should be fired.

  • Neotel WTF - 2010-12-23 09:21

    We are not looking for more competition in the wireless market - we (South Africa) needs more competition in the fixed line market. If Neotel supplied a decent ADSL or Fibre line - Id be there in a minute - who wants their wifi its like all the other wifi in SA maybe worse. How many wifi providers can we choose form - Loads. How many fixed line providers can we choose from - one Telkom! :( Very sad Neotel. Why does no company in SA want to invest in fixed line infrastructure including Telkom its an open market. Please Neotel wakeup - I'm aching to get rid of my Telkom line.

  • jj opperman - 2010-12-23 09:26

    The problem is al the ex telkom workers joined neotel and the same telkom way of working that is why neotel can't sirvive ,i work for them and the ex telkom managment they are useless

  • Shrek - 2010-12-23 09:38

    Telkom is simply too strong for Neotel. Many corporate customers that left Telkom for Neotel and now back with Telkom. @ Neanderthal - high costs 'cos of 30% electricity increases, double digit salary increases, all equipment is imported,etc....oh and the company you work for is all screwing their customers.

  • @ Neotel WTF - 2010-12-23 10:35

    The fixed line business is not profitable business. The consumer business (phones at homes) is also not profitable....thats why the statement a few months ago from Neotel. The money is in the corporate sector and thats where Telkom is untouchable. Our company uses Telkom for our data - we get the royal treatment from Telkom ie faults restored in less than 20 minutes!!!

  • Friend - 2010-12-23 14:00

    A friend of mine at Neotel revealed on Facebook this morning that they may be retrenched in Jan or Feb. So sad news for them 2 days before Christmas. Goodluck to all involved.

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