Full-year losses at Neotel widen to R1,8bn

rph72

rph72

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http://www.techcentral.co.za/losses-at-neotel-widen-to-r18bn/27031/

Neotel reported a total comprehensive loss of R1,8bn in the financial year to end March 2011, the latest annual report from parent Tata Communications has revealed. In 2010, the company turned in a loss of R1,15bn.
However, the company’s directors have expressed confidence in its ability to continue as a going concern. “They are satisfied that the group has access to adequate resources to continue in operational existence for the foreseeable future,” the report says.
The directors base this conclusion on Neotel’s shareholder profiles, specifically the backing of India’s Tata Communications and Tata Africa Holdings, which together own 68,5% of Neotel.
Neotel was licensed as the first fixed-line competitor to Telkom about five years ago after a difficult birth.
The company ended the year with cash and cash equivalents of R74,4m, up from R64,7m at the beginning of the year.
Shareholders have pledged support to fulfilling their obligations in respect of the injection of committed equity of R500m and the signing of a “third equity subscription agreement” in September.
According to the Tata Communications annual report, Neotel had undrawn funding of R597,3m from shareholders and undrawn funding facilities of R133m from lenders.
Management has taken “extensive steps to restructure the business” and based on this is confident of achieving a revised business case agreed to with lenders, the report says.
In addition, Neotel directors have expressed confidence in the company’s ability to manage cash flows on capital-intensive infrastructure projects and to manage cash flows associated with performance against its business plan.
The shareholders’ agreement also allows Neotel to “initiate a rights issue for the procurement of additional equity in the event that additional funding in the form of new equity is required in terms of the covenants under the long-term financing agreement”.
In the 2011 financial year, Neotel grew its revenues from R1,83bn to R2,3bn. Enterprise and wholesale services contributed most of this at R1,74bn (2010: R1,31bn), with network and project services making up R372,8m (R280,2m) and consumer services R188,4m (R169,3m). — Duncan McLeod, TechCentral
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Ag shame Neotel, maybe you should pack up & go back home.
 
Actually they can stay... if only for their business services. As for the consumer market?... I think they have already left.
 
Over a billion rand loss on only two billion turnover. these guys need some competitive retail products badly.

Sent from my GT-I9000 using Tapatalk
 
well when they're charging R80 a gig I'm not surprised. They have given us no reason to switch to them.
 
They could learn something from Cell C. I feel bad for them. They really had good intentions. I think they need to hang in there and come up with good strategies to get some market share and make some moola. The executive team should either shape up or butt out
 
Give the market what you insist they must have rather than listen and supply the demand... will result in this.

There is a demand, there is a need, listen, revise, supply.

The really sad thing is if they disappeared tomorrow, would anyone not employed by them even notice ? Zero is their impact. No loss really.
 
They are supposed to launch Consumer WiMax soon. The pricing better be good, otherwise there will be no hope in the consumer segment.
 
They are absolutely dependent upon getting access to the last mile and were most certainly given various promises by government et al which have not borne any fruit. I suspect that over the next 18 months or so Neotel's existance in SA will be properly tested and they will either reduce themselves to simply being Tata's local presence or actually get off the ground.
 
I hear about WiMAX about 5 years, but still not see any progress. Some tech guys were visited me, but hell, they even didn't know which kind of connection I want, mixing 3G and WiMAX! With such stupids WiMAX can bury itself :)
 
Wrong Technology Choice ...........

Neotel's choice of CDMA over WCDMA has left them in a really bad spot.

Roaming cannot be achieved with the mobile operators.

CDMA - data service is not great limited potential in terms of development.

Had they gone with WCDMA they would have opened themselves to use of every single USB modem in the country.

Right now its difficult for people to invest a lot of money just to test the service.

They have prime spectrum which is wasted.

800mhz / 1900mhz / 2100mhz / 3500mhz

ICASA needs to re-use some of this hoarded spectrum.

If they take a calculated decision and decide to bring on a foreign equity partner and redesign their network.

They will have a bigger customer base to expose themselves to.

They are dead in the the water only a matter of time sadly :(

DXL - Team
 
I was wondering by how much their CDMA coverage has expanded over the last two years or so. Haven't heard anything in ages. Are they still investing in their CDMA network?
 
Its surprising that this company continues to suffer despite the overwhelming hate levelled toward Telkom.
 
I suppose they have the same problem as the low cost airlines, its hard to compete against companies who's infrastructure has been build with tax payers money over a long period, and telkom still owned largely by government. How is it possible for a private company to compete with telkom's infrastructure. So i suppose this is why they played it safe, i mean after 5 years their services is mostly limited to cities. The only reason for anyone to switch to neotel is because of price, therefor a low marginal profit with a large capital investment and a small market share is a recipe for failure. Plus telkom can undercut them at anytime with a smile, cause as i already said they have the infrastructure and government support
 
They can die for all I care. They got an invitation to come to the party and never pitched up.

When last have we heard something from Tata. Nothing as I can recall.
 
Bring on the consumer Wimax or LTE. Till then you have 0 mindshare and 0 consumer revenue.
 
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