Neotel to accelerate network rollout
Neotel is finalising a R5 billion funding deal from local financiers that will accelerate the completion of its infrastructure projects.
The second national operator said yesterday that the same companies that had financed its R2 billion loan two years ago had agreed then to fund the deal. The financiers include Nedbank, Investec, the Industrial Development Corporation and the Development Bank of Southern Africa.
Neotel has already spent the R2 billion on its expansion programme, which includes rolling out fixed and wireless networks to provide voice and data products to the residential and businesses areas.
Ajay Pandey, the managing director of Neotel, said the fact that the company was able to raise the funding despite the turmoil in financial markets "shows enough confidence in the business".
Neotel plans to spend up to R11 billion, which will be a combination of debt and equity, over the next decade.
Tata Communications of India, which holds 26 percent in the company, is finalising the acquisition of a 30 percent stake held by Transnet and Eskom in Neotel. In June Tata said it had entered into an agreement to buy out the state-owned enterprises.
The transaction is expected to be announced in the next few weeks. Neotel has already bought Transnet’s telecoms arm, Transtel, for R230 million.
Yesterday Neotel launched two new consumer voice and data products with rates that are almost half the price consumers are now paying.
The products are aimed at consumers who need to make only voice calls.
"We believe that we have hit the nail on the head with this product, particularly in light of the current economic conditions," said Mukul Sharma, the executive head of Neotel’s consumer business unit.
"Consumers are feeling the pinch of global and local economic pressures and are continuously looking to save costs, but still stay in touch."
Neotel has expanded its network coverage in Johannesburg, Durban and Pretoria. It is targeting other areas in those cities before expanding to other provinces.
However, in Cape Town the roll-out has been slow because of the cities’ landscape.
Neotel’s consumer products are offered through wireless network, while businesses access its services mainly through fibreoptic network.
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