Neotel’s massive Broadband Infraco headache

Business Day recently reported that Broadband Infraco and Telkom plan to merge, and that Broadband Infraco wants to receive financial assistance “as soon as possible”.

According to the report, Broadband Infraco’s executives believe the company must be acquired to “preserve its value and assets”.

The merger will create a massive headache for Neotel, which uses Broadband Infraco’s infrastructure to deliver services.

“As a provider of network infrastructure services, Neotel both competes and collaborates with Broadband Infraco to deliver services to its customers,” said Neotel.

If the merger goes ahead, Neotel will need to purchase wholesale services from its competitor Telkom to service its customers.

Neotel has previously marketed the fact that it offers services to clients without touching Telkom’s network. This will not be possible if the Telkom-Broadband Infraco merger goes ahead.

Neotel was asked for feedback regarding the possible merger, but the company would not comment on the issue.

“It would be premature for Neotel to comment or speculate on a proposed merger,” said Neotel.

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Neotel’s massive Broadband Infraco headache