Liquid Telecom's big plans for Neotel - TechCentral

Liquid Telecom’s big plans for Neotel

Liquid Telecom CEO Nic Rudnick

Liquid Telecom, the fast-growing pan-African telecommunications operator controlled by Zimbabwean billionaire Strive Masiyiwa, will spend billions of rand expanding newly acquired subsidiary Neotel’s data centres, wireless networks and fixed-line broadband infrastructure.

Nic Rudnick, Liquid’s CEO, said in an interview this week that this includes a plan to take advantage of Neotel’s spectrum assets. Neotel is the only telecoms operator in South Africa with valuable “digital dividend” spectrum below 900MHz, and Rudnick has hinted that Liquid has big plans to exploit this frequency band in both urban and underserviced areas.

Under new management, Neotel will shed its image as South Africa’s “second network operator” – it was originally licensed to break Telkom’s monopoly – and become a leader in telecoms, Rudnick said.

On Friday, Liquid, which operates in 15 markets across Africa, completed the R6,5bn acquisition of Neotel from India’s Tata Communications and other shareholders, giving the Econet Group subsidiary its first significant presence in the South African market. Liquid swooped on Neotel after Vodacom, under regulatory pressure, failed to consummate a deal with Neotel.

Liquid is taking a 70% stake in Neotel, with Royal Bafokeng Holdings buying the remaining 30%, ensuring that the company is empowered at an equity level.

Already, Liquid has moved to change Neotel’s branding, dropping its trademark orange colour in favour of a blue and pink motif that emphasises the Liquid Telecom name. The Neotel name will, however, stay for now, though the company will now go to market as “Neotel Liquid Telecom”.

An early priority for Liquid Telecom will be merging the two companies’ networks to create a single infrastructure across its 15 African territories. “That will provide the ability for enterprises to connect across the continent where we have a footprint on a completely seamless basis,” Rudnick said. “It will be as easy to connect from South Africa to any of the other countries as it will to connect from one side of South Africa to the other.”

Operations will also be integrated in quick order. A new CEO has been found, and will be named in the coming weeks. The new CEO is not South African, but has extensive experience in African and international telecoms, Rudnick said.

The new shareholders have recapitalised Neotel, wiping out its debts and giving it a robust balance sheet that will allow it to begin upgrading its network, Rudnick said.

Neotel’s new brand identity

“Neotel tomorrow moves from being hamstrung with an unsustainable burden of debt to having substantial cash reserves. We have already raised meaningful capital and refinanced existing debt, which has further improved the position. Neotel starts tomorrow in a very healthy financial position.”

Liquid now plans to upgrade Neotel’s network, including its fibre footprint. It will also pump money into new data centres to take advantage of the explosive growth in demand for cloud computing and invest in wireless broadband.

“We will be making use of Neotel’s spectrum assets to provide a whole new generation of services,” he said, pointing out that those assets — in the 850MHz, 1,8GHz and 3,5GHz bands — are well suited to building both 4G/LTE and future 5G networks.

“We will make very good use of 850MHz – we have great plans for that as it will allow us to do some very smart things and provide services inside buildings. We have a roll-out planned for that spectrum,” he said. “We are very happy to have it because it allows us to do some very clever things that are not currently happening in the market. It will give us very good in-building coverage, particularly once 5G gets launched.”

With Royal Bafokeng Holdings, Neotel will also focus on providing access in underserviced areas. “We will look at increasing coverage in some of the outlying areas, not only rural, but also outlying towns that tend to be overlooked.”

Though Liquid Telecom’s principal focus has been on the business and enterprise segments, the recapitalised Neotel will continue to serve the retail consumer market, where it has more than 100 000 clients. However, its legacy CDMA network will be discontinued in favour of newer technology.

It will also deploy fibre to the home, but will be careful not to duplicate infrastructure to ensure a return on investment. “We won’t be rushing into Parkhurst.”

Rudnick declined to comment on the scandal that engulfed Neotel in 2015, when the company was accused of making illicit payments to a letterbox company called Homix — believed to have links to the Gupta family — to secure a multibillion-rand deal with Transnet. He said Liquid adheres to “the highest ethical standards” in all markets in which it operates. “Neotel will be operated according to those same high standards.”

Meanwhile, Liquid Telecom is still mulling the option of listing on a stock market, either in Europe or Africa. Econet founder Masiyiwa first raised the prospect of an initial public offering in 2015, and Rudnick said this week that his statement “remains valid”.

“We’re not rushing towards a listing, but it’s something we will continue to explore,” he said.

  • This article was also published in the Sunday Times of 12 February 2017
  • Davebee

    Memo to Nic. Nic, with respect to any Neotel rushing anywhere might I suggest that you and your head honchos in the board room initially do some rushing into your CALL CENTRE by way of a few test runs.
    Neotel’s call centre is a bloody disgrace and their general product knowledge is appalling, I can only imagine that your HR staff must have confused Call Centre with Garden Centre.
    Jack this up Niccy boy!

    P.S. Nic, did you know that Neotel offer a PHONE SERVICE with a difference? Yes, the difference being that they aint got any of them. So, CC is crap and supply line is crappier. Yup, much to be improved on before an IPO on the stock market meneer.

  • Neotel (Pty) Ltd

    Hi Dave, thank you for your feedback. We would like to gather further information on your experience to feedback to the business.
    Please kindly send us a direct message on our Facebook or Twitter page. We apologise for the inconvenience.

  • Dianne Miller

    Tried to mail Neotel yesterday from the website and the email address failed. I tried calling and the number just rang for ten mins. If you want to be taken seriously maybe look at those little details first. I would never do business with you if I cant even reach your call centre.

  • Neotel (Pty) Ltd

    Hi Dianne we apologise for the inconvenience. Please kindly send us further details via private message on our Facebook page and we will assist you?

  • Greg Mahlknecht

    Will be interesting to see where this goes – we just moved our work line off Neotel because they were twice the cost of the competition. They’re going to need to use a lot of their new capital to absorb some major price cuts if they’re to be competitive. For most business solutions, they’re even more expensive than Telkom.

  • Davebee

    I’m not on FACE BOOK or Twitter. I can tell you though that I’m now on DAY THREE of trying to get a simple phone service from your call centre. I DO HAVE a Neotel phone and all I needed was to have the number reactivated but still a NO GO.
    By the way your head office landline just does not get any response . at all calling: Neotel head office gives Zat, Zero, Niks, Bogger all.
    Try speaking to Petunia in your call centre she said she will help me, but no activation so far I’m afraid.

  • Boil Water

    “However, its legacy CDMA network will be discontinued in favour of newer technology.”

    does that means Neotel will now use GSM and not CDMA/EVDO? what will happen if I have a CDMA modem and the CDMA spectrum is discontinued?