The way forward
September 5, 2006

A welcome address by Mr Ajay Pandey, managing director, Neotel

The Minister of Communications, Dr Matsepe-Casaburri, Minister of Public Enterprises, Mr Erwin, Chairperson of ICASA, Director-General of the Department of Public Enterprises, business leaders, representatives of the media, distinguished guests, ladies and gentlemen…

I enjoy many aspects of Africa, one of which is the rich source of stories that make up the history of this diverse nation. Neotel is yet another story that will unfold. A story of inspiration, a story that promises progress.

In its very form, our new identity demonstrates our commitment to change your experience of telecommunications, to respond to your needs with efficient simplicity, and to become your preferred telecommunications partner.

As I welcome you today, let me remind ourselves that today, we make South African history. The launch of Neotel signifies a change in the landscape of our industry - the introduction of competition in the fixed line sector.

Today sees the birth not merely of a name, but of a new force in South African telecommunications. As you will see shortly, our first services are already live, fulfilling our first promise to the people of South Africa.

In my personal experience, telecommunications can transform communities, even an entire country. Through our entry into the South African market, we hope to open up new opportunities for businesses, and create new opportunities for South Africans on the global stage.

One such opportunity lies in the Business Process Outsourcing space, an area in which we at Neotel are committed to delivering offerings in line with the industry's needs. Thereby, hopefully, we will trigger off a different kind of revolution which, in my humble language, has the potential of making a real difference in the economic landscape of South Africa.

Beyond this, Neotel aims to be more than just another operator, but to make a meaningful contribution to the lives of ordinary South Africans.

We are proud of having introduced our very first services in such a short time-span since our licensing. But we are very conscious that this is a first step in our journey, the first chapter of our story. We hope to share with you many more such moments in the future, as we launch innovative services for all segments of the market.

Our licences allow Neotel to provide all voice and data telecom services in South Africa, including fixed-line and wireless access, and excluding only full-mobility services. As the first nation-wide infrastructure based competitor in the fixed-line telecoms market, Neotel aims to reduce the cost of doing business in the country and to extend the benefits of communications to the second economy.

Leveraging the vast telecom expertise and experience of its shareholders, including the Tata Group's global network, Neotel has access to international best practices and a better understanding of customer expectations. The experience of its South African shareholders, including Transnet and Eskom in the national market helps to translate international trends, products and services into the local environment, and to customise services to meet the specific requirements of each customer segment.

We anticipate a cumulative capex exceeding Rands 11 Bn in the first 10 years of our operations and expect this investment to fuel economic growth in the country. Neotel will make a significant impact on the skills development in the country, with the introduction of next-generation technology. Skills transfer from shareholders and various training programs including on the job training & equipment training through vendors will ensure the augmentation of specialised skills in the country.

Since my appointment in December last year, the company has grown from a one-man organisation, to a 40-person outfit, with a target of 250 employees by March 2007. In the last 9 months, we have obtained our PSTS Licence, a VANS licence, as well as the required Spectrum Licences critical for the operation of a fixed-line operator. We have also secured access to the long-distance as well as metro network assets created by Transnet and Eskom in anticipation of the second national operator.

In line with the realities of a new fixed telecommunications operator, Neotel is adopting a phased approach to the rollout of its services to different customer segments in various cities.

We have announced today the launch of our wholesale international services, and we will follow these up before the end of this year by making available national connectivity services to telecom operators as well as some large enterprise customers. These services will cater to the large nation-wide bandwidth requirements of such organisations and are expected to have a funnel down effect for the end users as well. We are already on the path towards achieving this target, having secured access to almost 8000 kms of long-distance, cross-country telecom infrastructure from the DPE and more than 1300 kms of telecoms network within the 5 major metros from Transnet. We are in the process of planning and have initiated the deployment of the last mile access as well. Over time, of course, we will expand our reach beyond the metros as well as to a much larger customer base.

The first quarter of next year will be a busy time for us, with a wider portfolio of enterprise voice and data services slated to be introduced for large corporate and enterprise customers. We aim to have our first customers for a full suite of next-generation business services - voice, data and Internet - on board by the end of February 2007.

Initial services for residential customers and SMMEs will be made available before the second quarter of 2007 in limited geographies. We will expand the scope of these services to gradually reach 80% of the country's population. We have been actively interacting with the Regulator in regard to the availability of the 800 MHz spectrum to ensure cost-effective and widespread delivery of voice and high speed Internet services to customers.

These are only a few, although significant, of the many milestones that Neotel will have to pass before we can say with true satisfaction that we have, indeed, changed the telecoms landscape of South Africa and that we have made progress in our journey. But that is where we have set our sights.

I think Winston Churchill said it best, when he said: "This is not the end, it is not even the beginning of the end, but it is, perhaps, the end of the beginning." Distinguished guests, ladies and gentlemen, at the very least, I can proudly say - the journey has begun.