Neotel grabs half of big firms from state-controlled Telkom

Bye bye Telkom:)

Check Telkom’s marketing nightmare enter www.hellkom.co.za, with hair-raising information, links to articles about their bullying tactics and high costs. Even the trade union Solidarity supports Hellkom. And to read the transcript of the Carte Blance interview, click here.

Telkom™ (NYSE:TKG) hasn't found it so funny, and in typical bully-boy style have threatened to sue for R5 million. But the lawyer from the prestigious firm of Adams and Adams got a few of his facts wrong. I guess lawyers do that all the time - they have to say what their client says, even when they are being stupid.

One of their customers complained to ICASA about the high price of ADSL. You can read the full complaint to ICASA here, and their stonewalling response is posted as well.

Johannesburg - Neotel, the number two fixed-line operator, has signed up almost half of the country's top 350 corporate clients in contracts worth more than R1.5bn, its chief said on Friday.

Neotel, controlled by India's Tata group, was launched in 2006. It started selling corporate services last year and retail services in May, aiming to muscle into a market dominated for years by state-controlled fixed-line operator Telkom.

Neotel competes for corporate clients with Telkom, Internet Solutions - a unit of Dimension Data - and Verizon South Africa, which is being bought by mobile phone group MTN.

Neotel now have a presence (with) about 170 to 180 of the top 350 customers in South Africa.

Dobek Pater, a telecoms analyst at Africa Analysis, said figures proved Neotel was a credible player.

"It has taken quite a long time for Neotel to gain a comprehensive presence in the market," he said. "It has been doing fairly well since launching its corporate services."
Neotel is rolling out wireless and fibre-optic networks to snatch fixed-line revenues from Telkom.

Neotel has so far invested more than R2bn in capital expenditure to roll out its network. The group would spend R11bn over the next 10 years.

Neotel employs almost 900 people, compared to Telkom's nearly 25 000 workforce.

Last month, India's Tata Communications announced it would buy a further 30% equity stake in Neotel from state-owned firms Eskom and Transnet.

This will enable Tata Communications along with Tata Africa to hold a 56 percent stake in Neotel. Other shareholders include Communitel, Nexus and Two Telecom Consortium.

Telkom also faces competition from MTN Group, Africa's biggest mobile operator which is spending R1.4bn to build a 5 000 km fibre-optic network allowing it to offer fixed-line services in South Africa.

In May, Neotel launched its first consumer product - NeoConnect Prime - and said it aimed to sign up about 60 000 customers in the next nine months.