Neotel reaches earnings milestone

Neotel CEO, Sunil Joshi has announced that the group has achieved its first operating profit since it launched in the country in 2006.

Joshi said that the group had turned earnings before interest and taxes positive for the year ended March 2013, having first reported its ebitda positive status in 2012.

The group said that is ebitda had grown in excess of 530% in 2013, from the prior year, although it pointed out that this was off a low base.

“We set ourselves a target, and we thumped the target,” said Steven Whiley, Neotel CFO.

Revenue grew 12% year on year, Joshi said at the group’s headquarters in Midrand on Wednesday (29 May).

In February, Neotel parent company, Tata Communications, reported that for the quarterly period, its start-up business, pertaining broadly to Neotel, showed a growth in revenues of 9% at R772 million, from R701 million before.

Joshi said that Neotel had trenched 8,000 kilometres of its own metro fibre, reaching 4,200 companies, having invested R500 million in capex in in FY2013, and adding to its total of R5 billion in infrastructure since inception.

“In the period under review we invested more than R500 million in capital expenditure, and now have access to over 15,000km of national long distance fibre and approximately 8,000km of fibre in major metros,” Joshi said in a statement.

Neotel said that the group would spend approximately R500 million in capex in the coming year.

According to Joshi, growth in enterprise customers is up 29% from 2012, while growth in small enterprise (SE) customers is up 52%. “We are just about touching 3,000 business clients, and 152,000 consumers,” Joshi said.

The company chief said that while the fixed telecoms market is set to grow at 1.4%, the biggest opportunities would come from small enterprise businesses and the government sector.

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Neotel reaches earnings milestone