Neotel chief confirms Vodacom talks ongoing
The managing director and chief executive of Neotel, the first converged network operator in South Africa, says sale talks with rival Vodacom are ongoing.
Sunil Joshi commented on the discussions in Neotel’s third quarter results statement, reiterating previous statements that a deal would be beneficial to both companies, but that no agreement will be reached until the firms negotiate suitable terms and conditions, and then receive regulatory clearance.
“[A] combined entity would be better placed to offer an expanded product range and level of increased funding and as a consequence, enhanced customer choice as well, while enabling Neotel to extend its footprint in South Africa,” Joshi said.
Vodafone subsidiary Vodacom revealed it is in talks to acquire Neotel late September, and pledged to pump funds into expanding fixed line access if successful.
However, Neotel may now be seeking a higher price after turning a pre-tax profit for the first time in its seven year history during the third quarter. The firm also recorded a 105% increase in EBITDA year on year, and grew revenues 21%.
Joshi says the growth outpaces the South African market, and attributes the success to the launch of new services, cost cutting, and a focus on customer service.