What went wrong with Neotel

Garyvdh said:
Neotel is not operating as a second national operator. The governent needs to take their license away and give it to someone else. Plain and simple
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surely, as per ponder's post, neotel isn't entirely to blame due to lack of access to the copper network, and guavamint's continued interference in telkom and icasa.
how would another operator help when they would run up against the same issue?
just asking.
 
Beri said:
I blame myself for this. We created the hype in this forum. The night in shining armour. that never came
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-1

They created the expectation. They didn't deliver. We are the victim...
 
Forget the time. The first correct step with Cell C was better management.
Step 2 was finding out what the customers want and listening to them.
Step 3 is planning, implementation and some time to get things done,
From there on its only time that tells.

Ne not existent fixed line operator.

MickeyD said:
Probably due to their Licence conditions that prevented this?
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They have the same license Telkom has ?
 
murraybiscuit said:
surely, as per ponder's post, neotel isn't entirely to blame due to lack of access to the copper network, and guavamint's continued interference in telkom and icasa.
how would another operator help when they would run up against the same issue?
just asking.
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Ja no... I agree that the government (especially the late Ivy) was to blame. But Neotel accepted the challenge. They should have made their intentions and strategy clear from the start. In all seriousness, people were expecting them to lay down a massive network. Something which they have only half heartedly done.

Is it fair to expect an SNO to invest heavily in physical network grid expansion? Yes, I think so.
 
Secondly, I stand corrected here. But I think Neotel has had problems with access to capital.

I know Neotel’s board of directors recently made a pronouncement it was “satisfied that the company has access to adequate resources to stay in business for the foreseeable future”.

Frankly, I think that’s being dishonest.
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Article was poorly written, was subjective on key arguments and did not cover enough spectrum to fully describe the precipitation to Neotel's current/poor standing.
 
yeti said:
Article was poorly written, was subjective on key arguments and did not cover enough spectrum to fully describe the precipitation to Neotel's current/poor standing.
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We await your expert submission, Mr. Critic! :D
 
All the armchair criticism aside, this is yet another sadly misinformed, and frankly, confused journalist. It's a good thing he makes it clear that these are purely personal opinions, since they have very little basis in fact, or in the telecoms market at all.

Most of Neotel's customers are businesses and other carriers - what does this have to do with individuals using mobile phones or not? For that matter, the fixed data market, where Neotel primarily plays, has been growing rapidly.

The implication is that Neotel couldn't take on Telkom in the business market, and had to make do with consumers. Really? Everything points to Neotel having had its major successes against Telkom in the business market.

As for the comment about access to capital, it's easy to find out exactly how much capital Neotel has had access to, and how the shareholders feel about it - a NYSE filing is where much of the current debate started.

This guy would have had way more credibility if he had commented on real issues, like customer service and delivery.
 
Garyvdh said:
Neotel is not operating as a second national operator. The governent needs to take their license away and give it to someone else. Plain and simple
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No, the whole concept of a "second national operator" is a bogus red herring. They should have issued five or ten such licenses, unbundled the Local Loop, and removed the communist-style restrictions in the licensing that hobble operators and force them to distort their business models. But we had a vrot corrupt government that was doing everything it could to protect its beloved Telkom.
 
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what went wrong? Neotel was fail before they even touched the ground, in price and service, a pathetic excuse for a competitor
 
Tick said:
No, the whole concept of a "second national operator" is a bogus red herring.
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+1

Nowhere in the world has this concept worked (anyone remember Mercury in the UK?). From the start, Neotel clearly distanced itself from the idea of the "SNO", and positioned itself as provider of next gen services, along the lines of successful challengers in other markets.

Competition in residential access (which is what I guess some of the more confused participants here think of as an "SNO") has most successfully been achieved around the world by Local Loop Unbundling, so let's hurry up and get it. FTTH also works, but normally for a much smaller part of the market, and it takes time.
 
Well, the article highlights "mistakes" and blames some of it on bad timing.

The only reason cellphone usage shot through the roof and fixed lines declined is because of pricing. We don't need to pay Cell C/MTN/Vodacom R130 ex vat a month to have a connection. We *maybe* pay that monthly and get a brand new phone WITH airtime. Prepaid is also much easier to manage than having it on contract and going on forever... and you get prepaid on Telkom lines. You pay R50 odd a *year* for having your Telkom fixed line on prepaid, and topup whenever you need "minutes" to phone. More or less what we want/need except we're forced into a R130ex vat payment on the line only to get charged more for the ADSL portion of the line (hold on, I have a point, this isn't a rant about Telkom)

So where the first and biggest mistake that Neotel made? Under-estimating the residential business and their needs for cheap-affordable-communications. The only reason cellphones boomed and fixed lines dropped was because of the manageable and CHEAPER costs associated for it. Most people I know still uses fixed lines for internet usage as it's the most stable/reliable you can get still. Wireless will always be a backup. And to those using it as a primary means of connection only uses it for things like... buh... text messaging? *shrug* (I'm reminded of the MTN advertisement showing 2mb is enough to check Facebook a month)

Sure, the money lies in "business" and "contracts". The only reason why business usually don't end contracts based on monthly usage is because THAT IS THE COST OF DOING BUSINESS. And since they're in a long-term contract anyway, quite hard to get out of in the first place. Regardless, Neotel should have been the front-line in lobbying for LLU since they started out. They were already installing their network and laying fibre/cables like crazy. Exploiting residential areas where there were a decline in fixed line usage and providing those people with cheap and affordable telephone lines would have really paid off in a couple of years...

Missed deadlines, empty promises and being totally clueless as to which technology to go with to deliver "wireless communications" (and making that your primary focus for the residential market from the onset...where the same residential market would prefer cellphones as their wireless communication device of choice because of the quality and huge coverage), was their downfall.

Let's hope November 2011 yields positive results.
 
I still rate Neotel as the second best fixed-line operator in South Africa, and some day, if they are eventually allowed to offer fixed lines, and if I found the need for a fixed line, they would be my second choice.
 
Neotel

The problem with Neotel is that they are *****'s. If they wanted to change the market, they should got in there guns blazing and provided T1 fibre links to every business in the country. Instead, they got cold feet and soon their offering could not longer be differentiated by the wireless entrants.
 
Idiotic tendencies.

What went wrong? Nothing "went" wrong - Neotel ACTED wrong.

  1. The whole limited capital statement makes little sense, seeing as Neofail is a Tata-owned company.
  2. Telecomms activists pushed hard for Neotel's entry as a FIXED line operator, but everyone was disappointed with what actually landed.
  3. Outdated EVDO tech, bad service, idiotic management, stone-age and over-priced hardware, contract-only business... is the finger the consumer got.
  4. Terrible planning, horrible roll-out, and even worse products was an ONGOING slap in the consumers face.

Neohell obviously has it all wrong, or tried to be worse than the existing telecomms services in SA. They brought a 5th-world product and service to a 3rd-world country... maybe they thought this is just another india?

So nothing "went" wrong, but was rather "done" wrong right from the start, and never really improved on. They slit their own throats with a very blunt knife... it was amusing to watch.
 
TheGuy said:
But knowing this why didn't Neotel start smaller? Take JHB for example Focus on providing Fiber to the Businesses and Wimax to residential users. Then once you have these services running like a well oiled machine you take the lesson learned and move to another city.
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+10000000

Really . Neotel dropped their own ball here .. they came into a country where people where literally selling off organs to pay the price of internet, had seriously overpriced telkom bills .. And then the proceeded to give the consumer market the middle finger ???

Really, a sound inter city fibre network (leased or built) and then big POP's in city centres, focusing on getting it right in high density areas, could of very well written a different end to this story. Instead, they focused on a market where the only business they were signing was the business Telkom couldnt give 2 cruds about ? I dont feel sorry for them AT ALL, they failed horribly, and with things like WiMax and cellular company agreements, they couldve had a large backhaul network in very little time, and cut Telkom right out the loop .. but instead, they bring rubbish products to market, where there cost is marginal, and charge an arm and a leg .. and they want people to feel sorry for them when the business model is RUBBISH.

Really, I think they should fire the whole board, and start again, Im no business mogul, but really .. I wouldve done a FAR better job than they did ?? Some people dont even know who Neotel is, never mind regard them as a Telkom alternative .. that to me .. signals a HUGE fail ...

(2c Given)
 
This article was abysmally written. The writer should find a new line of work. Chock full of grammatical errors, abortive quasi-sentences, dislocated paragraphs and misphrasings - it's a disgrace.
 
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Even if Neotel got access to the LLU and provided a cheaper servive than telkom, I would be very hesitant to use them due to their history of very bad service.

I believe that the position they are in, is totaly due to their own doing. Don't blame the LLU or market conditions. Perceptions that they mean absolutely nothing to the betterment of telecoms in SA is probably very valid.
 
cerebus said:
This article was abysmally written. The writer should find a new line of work. Chock full of grammatical errors, abortive quasi-sentences, dislocated paragraphs and misphrasings - it's a disgrace.
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agreed. the logic, structure and flow wasn't great either.
perhaps the journo should write a follow up on what should be done to fix the issues. that would give me more value as a reader.
telling us "it was hard" three times doesn't add much to the story.
 
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