Neotel: SA’s 2nd network online

1 September 2006

South Africa’s second telecommunications network operator has formally begun operations, opening its wholesale service and announcing its new name: Neotel.

Launching the operator in Midrand on Thursday, managing director Ajay Pandey said Neotel was committed to responding with “efficient simplicity” to the needs of its customers.

‘Gift’
“Our new identity demonstrates our commitment to change your experience of telecommunications … and to become your preferred telecommunications partner,” Pandey said in a statement.

“Neotel” comes from the Setswana word “neo”, meaning gift.

Pandey said Neotel’s entrance into South Africa’s telecommunications market would open up new opportunities for businesses and create new opportunities for South Africans on the global stage.

Network rollout
Pandey announced an R11-billion capital expenditure plan as the company develops its network and services. Neotel plans to offer services to the corporate and retail markets by the second quarter of 2007.

Up until now, state company Telkom has been the only provider of fixed line telecommunications services in the country; Neotel will give Telkom its first taste of real competition.

The second network operator was conceptualised to bring an end to the monopoly in SA’s fixed line telecommunications market, and to kick-start the “managed liberalisation” of the sector.

Neotel’s entry into the market is expected to help reduce the high costs of telecommunications, particularly broadband, in South Africa.

Shareholders
State companies Transnet and Eskom own 30% as part shareholders of the new network.

Neotel has already secured access to almost 8 000km of cross-country infrastructure from Eskom, and another 1 300km of networks in metropolitan areas from Transnet.

The other major shareholders in the consortium are Nexus Connexion with 19% and SEPCo with 51%. SEPCo consists of strategic equity partners each holding a share of SEPCo as follows: Tata (VSNL) 51%; CommuniTel 24.5%; Two Consortium 24.5%.

Pandey pointed out that Neotel was already a “serious player” in the Eastern Africa Submarine Cable System, an undersea cable that will links the eastern coast of Africa.

Communications benefits
Communications Minister Ivy Matsepe-Casaburri said she hoped the new operator would contribute to the success of the sector and the country at whole.

“This will help us respond to the competitiveness of our economy, to sustainable development and to meeting our goals,” she said.

Neotel’s arrival will also, for the first time, see South African internet carriers connected directly to the core of the internet through the operator’s connectivity to the global telecommunications network of VSNL International, which is regarded as one of the largest in the world.

It also aims to become the preferred provider of leading-edge telecommunications in the country, reducing the cost of doing business in SA.

Neotel will also attempt to bring the benefits of communications to the country’s “second economy” and to support developing industries.

SouthAfrica.info reporter and BuaNews

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