Neotel, South Africa’s first converged communications network operator, this week reported revenue growth of 12% while achieving the major milestone of being full-year EBIT positive for the first time since the company launched six years ago. Neotel’s EBITDA (Earnings before Interest, Tax, Depreciation and Amortisation) increased 531%. Neotel has remained consistently EBITDA positive for the past seven quarters.
Commenting on the results, Sunil Joshi, MD & CEO of Neotel said, “Amidst global uncertainty and a tougher competitive environment, Neotel has outperformed the local industry. We are extremely thankful to our customers for their support of competition in South Africa and for affording Neotel the opportunity to add value to their business. Neotel’s performance is a testimony to the innovative and cost effective solutions we offer our customers in South Africa and the dedicated focus from the entire Neotel team.”
In line with its articulated strategy, Neotel continues to capture market share. While the fixed-line telecommunications market in South Africa is projected to grow at 1.4% per annum until 2018, Neotel, across all business units, is growing at more than eight times this rate. Neotel’s core, enterprise customer base is up 29% year-on-year driven by underlying revenue growth of 44% in Managed Services and 24% in Network Services.
The company’s internet connectivity services from its two flagship products – NeoInternet and NeoBroadband – have witnessed over 75% revenue growth, while voice services revenue grew 24%.
In line with its role as a disruptive innovator, Neotel remains focused on optimising costs for its customers through innovative solutions. During the period, Neotel launched broadband on demand over fibre (Broadband Booster), along with South Africa’s second public TelePresence room, located at the Cape Town International Convention Centre.
This room connects seamlessly to the public room in Neotel’s Midrand campus, as well as 45 other public rooms around the world, enabling a new way of collaboration through simple high definition video technologies. During FY13, Neotel also forged a strategic partnership with NIIT to provide end-to-end school education and ICT solutions to learners in South Africa and the SADC region.
Similarly, Neotel reported a 52% increase in SE/ Retail (consumer) customers, driven by product innovations such as the NeoSmart device. The NeoSmart phone, South Africa’s first portable smart landline, combines accessibility and connectivity with affordable fixed-line rates.
Neotel remains on track to launch full-service Long Term Evolution (LTE) and offer a range of data solutions in targeted areas in South Africa.
Joshi continued: “In the period under review we invested more than R500m in capital expenditure, and now have access to over 15 000km of national long distance fibre and approximately 8 000km of fibre in major metros. We offer the latest converged IP voice, internet and data solutions to our business customers that can grow as they grow. This domestic fibre network is connected to all five undersea cables that land on South African shores, linking the major hubs within the country to each other as well as to global markets, both emerging and developed. Even the recent submarine cable outages had no negative impact on services to our customers due to this unique capability – we can proudly say that Neotel’s internet service has never gone down due to such faults”.
The company is reported to have announced its intention to launch the commercial service of its LTE (Long Term Evolution) in September.
Joshi is quoted as saying that the company would begin its commercial offering in a specific area of Gauteng and using 50 base stations, using the 1,800MHz frequency.