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Neotel targets R2bn

Apr 03 2008 16:13 Belinda Anderson

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Johannesburg - Neotel, South Africa's second licensed fixed-line operator, had already reached the R1bn in revenue mark, less than two years after launching its first services.

The company - which prefers to call itself the country's first converged communication network operator rather than the second national operator - predicts this number will double by the end of the next financial year to end-March 2009.

Part of its revenue comes from securing its own corporate clients (around R550m so far), and the rest from the acquisition of Transtel (roughly R550m), which recently got Competition Tribunal approval and became effective from April 1.

Neotel first launched its wholesale services in August 2006, but introduced its enterprise products to market just over a year later. It has so far secured business with more than 130 blue-chip customers, among them names like Standard Bank, SITA, Mittal, Internet Solutions, BT, Motorola and many others.

Transtel brings another 120 clients to the party.

Managing director Ajay Pandey said it was proud to say that it was already getting repeat business from 40% to 50% of its enterprise clients.

Although the first consumer services will be available a few weeks from now, on a soft launch basis in Johannesburg and Pretoria to start with, Pandey cautioned that the launch of its consumers services would not be a single big event. A wireless offering was "never a big-bang approach", he said.

But, customers would find dealing with Neotel "refreshing", he promised.

Neotel is fast laying cable in metropolitan areas, with the aim of servicing the 350 most important corporates on a fibre to the curb basis, so that each can receive its services within 48 to 72 hours of requesting them.

Its long-distance network so far consists of around 8 000km of fibre linking the major centres, and its metropolitan area networks, in the centres Gauteng, Durban and Cape Town, consist of around 2 200km of fibre.

For its international bandwidth, Neotel has access to the SAT3/Safe undersea cable network, but also has relationships with each of the three new prospective operators Seacom (it will land that cable in South Africa), Eassy and the Infraco West Coast cable.

Another of Neotels goals for the coming financial year is to double the size of the organisation.

Its own headcount consists of 327 people, but with that of Transtel, this rises to more than 800 people. Pandey said in a skills strapped sector, it was great to have that kind of resource pool.

Some recent executive level appointments include Mukul Sharma, as the executive head of the consumer business unit, who comes from Tata in Singapore and Calvin Theko, as the executive head of legal and company secretary, who comes from Eskom.

In addition to launching consumer services soon, Neotel also plans to raise its profile this year.

But, Pandey said it was also happy to keep flying below the radar, while continuing on a growth path: "We are happy to remain invisible, if people think we are," he said.

Asked when Neotel anticipated being profitable, Pandey said telecoms operators were very infrastructure- and capital-intensive, and typically took at least three years to come close to a position of profitability.

He said he was happy with Neotel's growth, but declined to be drawn on exactly when it expected to break even.

- Fin24

 
 
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