Neotel: ‘Telecoms prices should be 25% of what it is now’

Ajay Pandey, CEO of Neotel, says that local telecoms costs should be one fourth of what they are today.

Speaking on 702, Pandey said that local telecoms costs are far more expensive than international standards, and that Neotel will work towards reducing costs to this level.

This will however not happen overnight. Pandey expects prices to come down by between 25% and 33% when Neotel’s services become widely available, with a downward trend in prices thereafter.

Pandey further said that price reductions will not be the only advantage to consumers, but that they can expect improved Quality of Service from Neotel.

Pandey also pointed out that the cost of bandwidth in South Africa has already decreased which points to the positive effect of competition in the market.


When quizzed about Neotel’s broadband plans, Pandey stated that they will offer broadband services utilizing both fixed line and wireless technologies.

In areas where copper is available consumers can expect ADSL offerings from the new operator, but there will be a strong focus on Wireless Access.

The use of wireless technologies will, according to Pandey, ease problems related to installation time. These wireless technologies will make it possible for consumers to purchase a phone or Internet service, plug it in at home and activate the system.

When it comes to broadband speeds Pandey said that Neotel will definitely look at speeds exceeding 256, which will be in accordance with the recently released ADSL regulations’ definition of broadband.

These residential broadband services should become available in the early part of 2007.

Aggressive pricing needed

While Neotel has previously indicated that it does not want to engage in a price war with Telkom, it will have to bring added value to consumers if it wants to lure them away from the incumbent operator.

Exceptional customer service and innovative offerings will be an essential element in Neotel’s bid to win customers, but without aggressive pricing many people may feel that the company will have to prove itself first before they will consider migrating.

A combination of aggressive pricing, great customer service and world class services will however most likely see many current Telkom subscribers taking the plunge in support of the new operator.

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Neotel: ‘Telecoms prices should be 25% of what it is now’