Neotel armed to jab at Telkom

By Damaria Senne for Neotel
Johannesburg, 20 Mar 2008

The integration of Transtel into Neotel begins on 1 April, following yesterday's approval of the R230 million transaction by the Competition Tribunal, says Neotel spokesman Fani Zulu.

Neotel first announced its plans to acquire Transtel as a going concern in April last year. The acquisition allows Neotel to compete more aggressively with Telkom in the enterprise space.

"Neotel views the acquisition of Transtel as a strategic move to address a broader enterprise market. Transtel, with over 100 locations nationwide, will enable Neotel to deliver and support telecommunications services to address this market sooner than otherwise possible," says Neotel MD and CEO Ajay Pandey in a media statement.

The acquisition also gives Neotel faster entry into the enterprise markets, and provides it with a platform to introduce its next-generation services for businesses, he says.

Transtel also brings an existing customer base, which is said to generate in excess of R600 million per annum, he adds.

One of the customers is Transtel's former holding company Transnet, which has told the Competition Tribunal that it intends to appoint Neotel as the sole and exclusive provider of electronic communications services to Transnet for a period of five years.

Integration roadmap

Pandey says Neotel will, over the next month, contact Transtel customers, suppliers and other associates directly to communicate how the transaction affects them.

Zulu says one of the major tasks will be to integrate Transtel's network into Neotel's next-generation network (NGN).

This includes "some level of investment" to upgrade the Transtel network and enable smooth and efficient connectivity with the NGN, he says.

It is unlikely that Transtel customers will be heavily impacted by the transaction, as the company will remain a subsidiary of Neotel, and not be swallowed up as part of the integration process, he says.

"Transtel customers will remain clients of that company, with the added benefit of gaining access to Neotel's NGN," he says.

There will be no job losses as a result of the alignment of the companies' business processes, as some of the 550 Transtel employees have scarce skills that Neotel needs, he says.

"Neotel currently employs 20 to 30 new people per month and there is work to be done."

Gaining traction

Zulu notes that Neotel has become a significant player in the enterprise market since it launched its offering in November last year.

Neotel has signed a number of blue-chip companies, and is seeing a lot of repeat business and clients taking on additional services, he says. Business revenue is also growing and new solutions are being added, he says.

The company is also moving at a brisk pace with its fibre roll-out, having already covered Sandton, Rosebank, downtown Johannesburg, downtown Pretoria, Cape Town and Durban. Companies that want fibre can effectively get it within 72 hours, he says.

"Those fibre roll-out plans that you usually see on PowerPoint presentations have become reality for Neotel," he adds.