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IT and Telecoms: Positive Benefits Result from Neotel’s Acquisition


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With the SA telecoms industry looking set for major changes, from major regulatory changes and consolidation/convergence at home to pan-African and international expansion by some players, the strategic decision by Neotel the new telecommunications provider, to acquire Transtel has proved to be quite an inspired one. The acquisition has positioned Neotel to strengthen and expand current domestic business, while at the same time positioning the operator to extend business beyond the South African market in the future.

The acquisition and integration of the Transtel business has allowed Neotel to provide a wider set of products and services, especially value added managed services. The provision of managed services, which Transtel had successfully rolled out to its main group of customers over a year ago, will enable Neotel to build on this platform and to unleash the full capabilities of its NGN network.

According to Harjit Singh, Principal Executive Officer at Neotel, both Transtel and Neotel customers have been positively affected by the acquisition as they now have a wider product and service set to choose from. “In the near future there will be consolidation of the platforms and processes from which these services are being provided which will give our customers even better service,” he says. It is such consolidation, in technology, products and customers, which now and even more so in future, enables Neotel to serve geographically diverse set of customers with improved and more cost effective offerings.

Consolidation on the human resources and skills has resulted in Neotel establishing a new network operations and maintenance company. “We have established Neotel Business Support Services (NBSS), with a business model different from that of Neotel. NBSS will support Neotel, and other operators, in the roll-out and maintenance of both their core as well as customer specific networks.

Through the Transtel VSAT business, Neotel will also be able to provide satellite backhauling services to domestic operators, while also providing sub-Saharan Africa connectivity to corporate companies and operators. This also bodes very well with Neotel’s involvement in several African sub-marine cable systems, not least of which is the SEACOM submarine cable which aims to improve and diversify sub-Saharan Africa connectivity to the rest of the world.

In order for the acquisition to deliver as smoothly as possible, Neotel took a strategic decision for a phased integration process aimed at maximizing the assets, infrastructure and competencies of both parties. “During the planning phase we finalised the Neotel target organisation and functional blue prints, the Neotel Business Support Services (NBSS) operating model and business plan and the Seamless Customer migration plan,” he says. “We have started to implement these plans and they will ultimately result in our customers benefiting from improved service delivery.”

“Looking forward, I am positive that customers will continue to see the added benefit they now have from this acquisition and we will continue to focus on improving our service delivery,” says Singh. “This acquisition is proof that companies can merge successfully and benefit from it,” he concludes.

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