Tata-led Neotel poised for success in South Africa

April 4th, 2008 - 10:55 pm ICT by admin  

By Fakir Hassen
Johannesburg, April 4 (IANS) Tata-led telecom consortium Neotel is poised for huge success in South Africa, with revenue set to double to two billion rands in the coming fiscal, and half the current corporate clients renewing their contracts, the company said here. Despite stiff competition from the former state-owned monopoly Telkom, Neotel has achieved major successes since being granted a licence to run as South Africa’s second national operator.

Barely two years after it went live with its first services, Neotel had revenue of a billion rands in its first full year ending March 2008.

“We have had a phenomenal 12 to 18 months,” Neotel chief executive Ajay Pandey told the daily Business Report here Friday.

“We are no longer a company sitting in the corner - we are a telecommunications company that is growing fast.”

This growth has come from corporate clients that include media giants such as Independent Newspapers and Bloomberg, as well as mobile operators MTN and Cell C.

Commenting on the customer satisfaction that Neotel aimed at implementing, Pandey said 40-50 percent of its customers were renewing their orders in the wake of a 30 percent price cut.

But Pandey did not comment on reports by analysts here that profitability for Neotel was still “a good few years away”.

Telecoms analyst Dobek Pater of Africa Analysis told Business Report that with its targeted revenue of two billion rands, Neotel would account for about two percent of the country’s total telecoms services market revenue.

Pater said Neotel had been late to enter the consumer market in South Africa, which had set it back when compared to other emerging competitors, such as Vox and iBurst.

Neotel will also have to fight with other potential future competitors with established complementary client bases in the telecom industry.

It plans to introduce a range of products, including voice and high speed internet through wireless technologies for the consumer market at the end of this month. Initially this will be available only in major cities in South Africa.

Neotel is South Africa’s first converged communications network operator. The firm aims to reduce the cost of doing business by enhancing the operational efficiencies of companies through the optimal use of advanced communications technologies.

The telecom licences granted to Neotel allow the company to provide the entire range of telecoms services with the exception of full mobility.

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