Neotel targets 50 000 consumers

By Candice Jones for Neotel
Johannesburg, 13 Jun 2008

Neotel hopes to bring 50 000 customers on board its consumer services segment by March next year.

This is according to PR manager Zinhle Modiselle, who says the response to the company's consumer services has been positive. "There has been a keen interest for all types of product packages."

The company initiated its consumer services last month and its business services were officially launched in November last year, almost two years after the operator was licensed. "We have had a significant amount of applications and requests for services from all across the region," says Modiselle.

While the company is keeping actual subscriber numbers under wraps, she says: "The up-take of the service within the Neotel coverage area has been promising and we expect an even greater response as we continue to expand our coverage on a daily basis."

Neotel's consumer offering, NeoConnect, is built on CDMA2000, a wireless 3G standard used globally. The offering is converged voice and data ranging from a 2GB product, costing R299 per month, to an unlimited bandwidth offering, priced at R999 per month, she notes.

According to Modiselle, the company is looking to introduce a small and medium business package, although she did not specify an expected date. "We have a team of product development people dedicated to bringing the latest technology to both the consumer and business markets."

Telkom's woes

Meanwhile, Telkom is feeling pressure from a changing local telecommunications landscape.

In its group annual results, released this week, Telkom reported a drop of more than R1 billion in its fixed-line voice revenue, to R6.3 billion for the period ended 31 March 2008, from R7.6 billion the previous year.

CEO Reuben September said: "Both the fixed-line and mobile segments are operating in changing and challenging business environments. As mobile voice growth slows, the mobile segment is aggressively expanding into data and particularly corporate data. The fixed-line is challenged with increased competition and pricing pressures in its traditional high margin, predominantly retail markets."

Telkom's number of fixed access lines also dropped from 4.6 million in 2007 to 4.5 million this year. Telkom has stated it expects to lose 10% to 15% of the market share to competition. It has also said it is taking active steps to combat that competition.

The financial report reads: "Faced with competition eroding our revenue base, cost management is a key element in creating shareholder value."

According to Irnest Kaplan, MD of Kaplan Equity Analysts, Telkom needs to defend its market share from Neotel. "Telkom is going from spoilt to some real competition. If the management is not strong, Telkom will have a problem maintaining market share."