Neotel posts first ever profit; Vodafone will not raise Vodacom stake; Telkom issues LLU warning

1 Nov 2013

Neotel, the South African unit of India’s Tata Communications, said it made a pre-tax profit for the first time in its seven-year history after growing revenue by 21%. Chief Executive Sunil Joshi told Reuters that its sales growth was at least twelve times that of the industry growth rate, despite price erosion and lethargic uptake of fixed lines.

Vodafone Group says it has no current aspirations to increase its share in South African operator, Vodacom, of which it is already a majority shareholder, despite increasing its stake in Vodafone India. Ben Padovan, head of group media relations at Vodafone told BusinessTech: ‘There is no read across into other markets, and this has happened in India now because the sector caps governing foreign investment in telecoms companies has just been lifted from 74% to 100% in India’.

Telkom South Africa has warned the Independent Communications Authority of South Africa (ICASA) that if it forces it to unbundle its local loop, it will have no choice but to raise its prices in response. According to TechCentral, the warning was contained in a written submission to the watchdog prepared in response to draft regulations on LLU. The submission, the covering letter for which was signed by Telkom group CEO Sipho Maseko, warns that if LLU is introduced it will benefit only a small minority of wealthy customers and businesses in urban areas to the detriment of most South Africans.