Neotel, which is being bought out by Vodacom in a R7 billion deal, has been continuing along its path towards profitability, declaring a full-year pre-tax profit of R87 million off revenue of R3.9 billion.
This year, for the period to March, was the first time the group has published actual numbers as it usually only releases percentage gained. Revenue grew 23%, and the group more than doubled earnings before interest, tax, depreciation and amortisation to just over R1 billion.
Neotel CEO and MD Sunil Joshi says the income statement gains were the result of a boost in its customer base. Neotel now has 200 000 subscribers, having grown its customer base 33% in the past year. Its business clients are now at almost 3 000, a 28% gain year-on-year.
Since launch in August 2006, Neotel has grown its customer base 50%. Joshi says the company, which has 1 000 staff, is growing at 16 times the industry average.
Joshi says while the Vodacom deal is pending regulatory approval from the Competition Commission and the Independent Communications Authority of SA, it is business as usual for the company.
Neotel intends extending its gains in the market, and continuing to work towards becoming more profitable, says Joshi. He notes the group will again invest R500 million in capital spending this year, the bulk of which will go into its network.
So far, Neotel has spent R5.8 billion on infrastructure in total and is carrying debt of R4.5 billion, says Joshi. He notes the Vodacom deal, if it is approved, would give Neotel more scale and allow it to increase its footprint at a faster rate than what its current investment levels allow.
Neotel has access to more than 16 000km of fibre-optic cable, including 9 000km of metro fibre in Johannesburg, Cape Town and Durban, as well as two chunks of 12MHz of space in the 1 800MHz spectrum range, two units - each of 5MHz - in the 800MHz range, and two blocks of frequency in 3.5GHz.
In the six months to September, Neotel turned over around R1.8 billion and reported earnings before interest, tax, depreciation and amortisation of R470 million. It invested R220 million in its network.
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