|Neotel, in partnership with state-owned infrastructure provider Infraco, is expanding its operations to neighbouring countries in a bid to foster relationships that could give it a chance to offer services in those markets.
Neotel said last week that it had rolled out its fibre network in Lesotho and Namibia. Botswana and Mozambique were expected to be completed in the next few weeks. This would provide an alternative option to customers to access undersea cables, and thus international connectivity.
“We are not going to be selling services to these countries. Our priority remains South Africa and we have already made tremendous strides in connecting the five metros and will next focus on growing the network across the rest of South Africa,” said Imran Abbas, the executive head of Neotel’s Business Support Service.
Neotel would not comment on revenue projections from the interconnections agreement because it had not factored it in its revenue projection for this year.
Neotel had customers that it was already servicing in Zimbabwe, Zambia and Tanzania, which it inherited from Transtel, but had yet to decide on further expansion into the continent.
The group, which had access to Seacom’s undersea cable and Tata Communications’ global network, had signed interconnection agreements with operators in those countries to allow its existing customers to communicate internationally.
Neotel would carry customer traffic from the borders into its point of presence in those countries and internationally.
Interconnection rates are fees that firms pay each other to route calls on each other’s networks. “Interconnect is part of building any telecoms network. We have therefore embarked on a proactive strategy to provide interconnect into those countries, to offer an alternative to the incumbent,” said Abbas.
Neotel, in partnership with MTN, is spending R2 billion to build a 5 000km national long-distance network to increase its coverage in the country.
The group launched its operations in South Africa three years ago. It had a capital expenditure of R11bn over a decade. It was laying fibre in major areas to provide its fixed-mobile products to clients both residential and corporate.
Last month the firm said its Neotel Business unit had tripled its customer base. Earlier this year Tata Communications announced it had increased its shareholding in Neotel to 56 percent.