Vodacom reach agreement to buy Neotel for R7 billion

This will be interesting for Neotel hosting/business customers. In a comparative quote done about 8 months ago, Vodacom Business was 150% (!) more expensive than Neotel - all the services and SLA's quoted were like-for-like. So either Vodacom Business customers will now benefit for lower rates (doubt it) or Neotel customers will see sudden increase in cost (although likely, difficult as contracts are termed).

This can open huge opportunities for both (as Neotel's infrastructure/agility is good, but it's execution management is poor / Vodacom has too much bureaucracy and lacks agility) but somehow I think VC will mess it up (Gateway Comms, Autopage and a ton of others come to mind)
 
Madman88 said:
Neotel never where a contender on the consumer front, so I cant see the consumer losing here.
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True, but I don't see Vodacom doing anything for the consumer either. They profit well from data services and are unlikely to release that stranglehold. They will probably assimilate the fibre infrastructure and service business that way. Consumers will have to move to Vodacom mobile.
 
freematrix said:
From my perspective, I believe Neotel has achieved very little in the country. They did not compete with Telkom and just filled a few gaps where they could.

Goodbye and you will not be missed.

Good luck to Vodacom. Please compete with Telkom and offer more at less.
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this is vodacom we are talking about, you sure they offer more for less?
 
freematrix said:
From my perspective, I believe Neotel has achieved very little in the country. They did not compete with Telkom and just filled a few gaps where they could.

Goodbye and you will not be missed.

Good luck to Vodacom. Please compete with Telkom and offer more at less.
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Agreed - while VC may not be a great champion of the consumer, I can't say that Neotel has done anything to impress me so maybe VC can use this opportunity to innovate...

mmmig said:
Sad day for the consumer and industry
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...and change that perception. Nothing has changed: NT still does nothing for the consumer. Well, next to. Some innovation from Vodacom may go a long way to benefiting the consumer. I fail to see how it is a said day.
 
R13... said:
True, but I don't see Vodacom doing anything for the consumer either. They profit well from data services and are unlikely to release that stranglehold. They will probably assimilate the fibre infrastructure and service business that way. Consumers will have to move to Vodacom mobile.
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I agree. No gain for consumers, but certainly no loss. Perhaps they will use the network to make their services better, then the average VC consumer will gain in service terms, but other than that... meh.
 
rpm said:
The shareholders of Neotel and Vodacom SA have announced today that they have favourably concluded an agreement on the commercial structure and terms to proceed for Vodacom to acquire 100 per cent of the shares of Neotel valued at an enterprise value of R 7.0 billion. This follows the announcement late last year that the parties were entering into exclusive talks for a due diligence.

The structure of the deal and its commercial terms remain subject to regulatory and competition authority approvals and the parties will be immediately commencing the necessary processes in that regard.

Sunil Joshi, MD & CEO of Neotel says, “We are encouraged at the progress made to date and will focus now on ensuring compliance with the regulatory approvals processes and the engagement with the competition authorities. Neotel continues to grow in the South African market and with this, when approved, will enable a greater choice of product and services for our customers and increased competition, while Neotel continues to deliver improved services and grows its customer base.“

Kennedy Memani, Nexus Connexion says, “This transaction will impact the landscape of the Telecommunications industry in South Africa. We believe it will enhance the customer experience and benefit the South African public.”
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So Neotel will remain a going concern then?

Will be very interesting how the market review processes embarked on by ICASA are going to be responded to by Vodacom
 
I suspect Competition Commission might put same condition that they put on Telkom, break Wholesale from Consumer and no separate charging for Internal ISP vs Outside, i.e. way this will make Telkom to double its effort as now the competition has a know how and pockets to compete.
 
Watch next years subs get a hefty 'cost-of-living' increase :(
 
Dlamaqhinga said:
I suspect Competition Commission might put same condition that they put on Telkom, break Wholesale from Consumer and no separate charging for Internal ISP vs Outside, i.e. way this will make Telkom to double its effort as now the competition has a know how and pockets to compete.
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And remember Facilities Leasing!
 
MickeyD said:
I think it will... for a year or two. And then VC will motivate for the demise of the neotel brand and incorporate them fully into the VC business i.e. wear down the regulator!
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If that is their strategy then they seriously need to revisit their stratplan
The regulator is growing teeth ...

Also the Vodacom brand is a question in itself - Vodacom -> Vodafone ...
 
Well done!
FTTH will be rolled out faster, pricing might be high for now, but come 2018 our internet worries will be sorted.
 
This is great news, Vodacom have very deep pockets and Neotel has a lot of useful spectrum and quite a bit of fibre in the ground.

Telkom might finally see some competition.

Just remember that Vodacom is majority owned by Vodafone who know how to compete.
 
grim said:
This is great news, Vodacom have very deep pockets and Neotel has a lot of useful spectrum and quite a bit of fibre in the ground.

Telkom might finally see some competition.

Just remember that Vodacom is majority owned by Vodafone who know how to compete.
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And they have on average a better service rating and channels.
 
As a consumer and not a great Vodacom fan I have to say I'm glad this is going through,Neotel really is wasting that spectrum,better a company overcharging for the spectrum nationwide which gives people more options than a stupid company that can only offer sub-par wireless services in some areas.
 
grim said:
This is great news, Vodacom have very deep pockets and Neotel has a lot of useful spectrum and quite a bit of fibre in the ground.

Telkom might finally see some competition.

Just remember that Vodacom is majority owned by Vodafone who know how to compete.
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How is 15 000 km + 8 000 km a bit compared to Telkom's 150000km, that is 10%, i.e. a fraction.
 
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