Neotel revenue hits R3.9 billion

Fixed line telco, Neotel on Monday (26 May) announced that it lifted revenue by 23% to R3.9 billion for the year ended March 2014, on the back of solid customer growth.

This represents the first time that the company has reported actual figures on its financial results, since it launched in 2006.

The group said that it turned profitable before tax for the first time since its inception, ending 2014 with a figure of R87 million.

Neotel pointed to earnings before interest, taxes, depreciation, and amortisation of just over R1 billion, affording the company a capex spend of R500 million in the coming financial year.

Neotel said total business subscribers grew by 28%, while small enterprise and retail customers grew 33%.

Total customers grew to 200,000, from 175,000 in the half year period, while business clients stood at just under 3,000.

Last week, Vodacom said it had reached an agreement to acquire 100% of the issued share capital in, and shareholder loans against Neotel for a total cash consideration of R7 billion.

Vodacom CEO Shameel Joosub said that Neotel, as a combined fixed enterprise business, will create a service provider with annual revenues of over R5 billion.

Sunil Joshi, MD and CEO of Neotel, said that although growth and results were good, it needed the Vodacom deal to go through in order to proceed for scale and investment.

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Neotel revenue hits R3.9 billion