Neotel records 23% revenue growth

By Phumeza Tontsi for Neotel
Johannesburg, 26 May 2014

Neotel, South Africa's first converged communications network operator, has released positive results showing consistent year-on-year growth. At the company's financial results presentation today, for the year ending March 2014, Neotel reported a 23% growth in revenue.

The company also announced a 28% increase in business customers and its small enterprise and retail customers growing at 33%. EBITDA (Earnings before interest, tax, depreciation and amortisation) doubled, and free cash flow also improved, achieving PBT positive results for the financial year ending 31 March 2014.

"The Neotel business continues to show strong growth. While there is considerable growth still to be realised, these results evidence the hard work from Team Neotel over the last 12 months," says Sunil Joshi, Managing Director and CEO of Neotel.

Neotel invested R500 million in capex last year to expand its network footprint, and launched a number of game-changing services, such as usage-based wide area network and usage-based broadband. Neotel grew revenue across all its business units, including Managed Services, Network Services, NeoVoice and NeoInternet and NeoBroadband. Neotel has also once again been rated a Level 3 B-BBEE contributor.

"Team Neotel is pleased with the results and together we thank our customers for their support over the year(s) to enable us to achieve these results," said Joshi.

Neotel unveils new wireless broadband platform for SMEs

Commenting on the recently announced Vodacom transaction, Joshi said: "The transaction with Vodacom is very important for Neotel's future, and when approved, will enable Neotel to offer a broader suite of products and services to its customers by combining fixed-mobile convergence technology solutions and an infrastructure of scale across South Africa. The combined entity will also increase competition in the industry and more effectively compete against the incumbent, among others."

He noted, however, that "the regulatory and competition approval processes would now be the focus of the coming months, and while that is under way, it would be an even stronger focus on business as usual, while we execute the FY15 strategy".

Neotel

Neotel is South Africa's first converged communications network operator. It provides a range of value-added voice, Internet and data services for businesses, wholesale network operators and providers and retail customers using its IP next-generation network, powered by Neotel's high-performance fibre-optic backbone. Neotel connects the major centres in South Africa to each other and to the world, directly linking its infrastructure into Tata Communications' global Tier 1 network. Neotel offers fresh thinking, a creative approach, and flexible solutions for communications in South Africa. Neotel continues to invest in developing a world-class fibre network infrastructure, which now spans Johannesburg, Pretoria, Durban, Cape Town, Pietermaritzburg, Port Elizabeth and traverses approximately 30 other cities, towns and villages in South Africa.

In May 2014, Vodacom and Neotel confirmed they have reached an agreement on the key commercial terms for Vodacom to acquire 100% of the equity in Neotel.

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