Neotel promises 'big bang'

By Damaria Senne for Neotel
Johannesburg, 02 Aug 2007

Second national operator Neotel is promising to stamp its authority on the local communications sector when it launches its core product offering next month, vowing to increase competition in this space.

Neotel spokesperson Mala Suriah would not provide details of the offering at this stage. However, she says the launch will be the "biggest event Neotel has ever had" and will focus on Neotel's core offerings, to business and consumers.

"People will know what Neotel stands for after the launch," she says.

This seems to be in line with Neotel's plans to provide wireless connectivity to all of SA's major cities, in addition to large corporate customers having access to a range of services

In November last year, executive head of strategy Angus Hay indicated the company expected to start offering domestic voice and data services to businesses in January. However, this was subsequently pushed back to mid-year.

It is expected that Neotel's product launch next month would include consumer services. The second national operator is currently doing CDMA trials for consumer voice and data services. MD Ajay Pandey previously said Neotel would launch consumer services once the trial is completed.

Suriah adds that Neotel recently launched its leased-line services (Neolink), which provide point-to-point connectivity to power customers' networks. She says take-up on the service has been steady. "Neotel is looking for quality, friendly customers who will grow with the company," she adds.

While no capital expenditure details are available at this stage, Neotel previously said it would spend some R11 billion on infrastructure over the next 10 years. At its highest, this is expected to reach R5 billion in one year.

Behind the scenes

Meanwhile, Neotel has been criticised by ICT stakeholders for failing to launch its offerings as a matter of urgency.

Earlier this year, deputy president Phumzile Mlambo-Ncquka said she was disappointed Neotel has not made an impact on the telecoms sector since it was licensed in December 2005.

Suriah says Neotel was quiet about its potential offerings because it did not have something substantial to offer yet.

"Neotel did not have anything to promise then, and we do not go to market and make promises unless we can keep them," she says.

Preparations for the rolling out of services included deploying national infrastructure, putting call centre facilities in place and providing staff with the necessary training, she says. Neotel has also set up offices in Durban and Cape Town, she adds.

A recent win for Neotel came in May, when the operator landed a contract to deploy a R454 million next-generation network for the State IT Agency, which will replace the current government common core network. The Neotel contract, which involves the provision of bandwidth connectivity, is worth R378 million.

Suriah says Neotel is aware that it is launching communications services in an environment that has changed since it was first licensed. Telkom is no longer the only major competition. "Neotel is not competing in a fixed-line environment; it is operating in a converged communications space."

She says Neotel has also completed the integration of Transtel, which it bought from Transnet for R230 million earlier this year. The deal has not yet gained the approval of the Competition Commission, she adds.