by Samantha James

Neotels' competitive strategy leadership

A breakthrough performance

Neotel has been commended for its competitive strategies
Fibre optics.jpg

Neotel, a telecommunications company has been commended for its impressive performance, during the financial year 2011-2012, and its commitment to improving access to communications for customers.

Neotel has demonstrated its ability to leverage competitive intelligence through targeting corporate and small and medium enterprises (SME) in South Africa, as well as generating new revenue streams through niche service offerings.

“The company’s strategy is to provide tailored services meeting the requirements of target customers through innovative products and offerings, at affordable costs,” noted Frost & Sullivan’s Information & Communication Technologies Research Analyst, Mervin Miemoukanda. “Neotel has introduced a suite of hosted and managed services, such as hosted contact centres and virtual hosting, to meet the needs of its corporate and SME customers.”

For instance, Neo One is the first South African all-in-one solution for business’ corporate needs allowing customers access to a range of Neotel’s IP services including voice and data at affordable rates, using a single converged network platform.

In addition, Neotel has understood corporate customers’ needs for higher power density in their data centres for their computing platforms.  It has, therefore, introduced the highest power density per rack in South Africa, with power per rack ranging between 2.4Kw and 5.4Kw. Unlike its competitors, customers are only charged for additional power usage if they have overused the maximum power per rack of 5.4Kw.

“Identifying managed services and cloud-based services as the future growth driver, Neotel has seized the opportunity of deploying extensive fibre optic infrastructure to target small, medium and large corporate customers earlier than its competitors,” remarked Miemoukanda. “Furthermore, the company is the only South African-based telco to have equity stakes in all the five undersea cables landing on the shores of the country.”

The company has leveraged its IP and fibre based converged infrastructure to offer superior broadband packages, and other value added services, targeting both consumers and businesses. For example, Neotel was the first network operator to launch public Telepresence rooms in South Africa.  NeoConnect Homes is another unique offering providing new packages and bundles increasing the choice of data and voice solutions to consumers and small businesses.

The successful implementation of such competitive strategies has resulted in positive Earnings Before Interest, Taxes, Depreciation and Amortization(EBIDTA) for the third interim result in a row. For the first half of the year 2012 (March 2012-September 2012), Neotel achieved 18% and 30% growth in the business and consumer segments, respectively.

The contribution ratio between the enterprise and consumer customers was 90 and 10% respectively, with an increase from 2,000 to 2,400 enterprise customers in the last six months. Consumer customers also grew from 100,000 to 130,000 in the same period, from March 2012 to September 2012.

“This impressive performance can be attributed to a streamlined business and increased focus on customers and their requirements,” said Miemoukanda. “In particular, the company has excelled in improving customer experience, both in terms of service assurance and delivery.”

The company has managed to maintain higher improvement in both the mean time to resolve customer queries (MTTR) and service delivery in the first of the year 2012. In addition, Neotel has passed on the benefits of decreased voice and data tariffs to its customers, thus enabling it to retain existing customers and acquire new ones in the process.

Frost & Sullivan presents this award to the company demonstrating excellence in leveraging competitive intelligence and executing its competitive strategy. The company’s competitive strategy is also recognised for the impact it has had on market share, competitive brand positioning (brand strength and unique market position) and customer satisfaction/value.

Frost & Sullivan Best Practices awards acknowledge companies in a variety of regional and global markets for demonstrating outstanding achievement and superior performance in areas such as leadership, technological innovation, customer service, and strategic product development. Industry analysts compare market participants and measure performance through in-depth interviews, analysis, and extensive secondary research to identify best practices in the industry.

About Neotel

As South Africa’s first converged communications network operator, Neotel provides a range of value-added voice and data services for businesses, wholesale network operators, providers and consumers using its pure-IP next generation network. Through its high-performance fibre optic backbone, Neotel connects the 40 largest cities and towns in South Africa to each other and to the world, directly linking the country into Tata Communications’ global Tier 1 network.

Neotel offers fresh thinking, a creative approach and flexible solutions for communications in South Africa. Neotel continues to invest in developing a world-class fibre network infrastructure, and a wireless network which now spans Johannesburg, Pretoria, Durban, Cape Town, Pietermaritzburg and Port Elizabeth reaching nearly 9 million consumers. See www.neotel.co.za for more information.

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