Welcome to Neotel, Telkom’s reason for thinking twice

The end of August saw the launch of South Africa’s second national operator, Neotel.  Neotel is the first real competition for Telkom, the incumbent national operator of South Africa’s fixed line telecommunication service.  The launch of Neotel saw announcements that Neotel already services some of South Africa’s other telecommunications providers, namely MTN, Vodacom and even Telkom itself.

Neotel will offer three categories of services over time: whoelsale, business and consumer.  As for its wholesale services, this is what Neotel has to say:

For the first time ever, the core of the Internet is now directly available to carriers in Johannesburg. Telecoms operators, service providers and resellers can finally experience the reach and performance of a global carrier combined with the local presence of South Africa’s new leading-edge carrier. Wholesale International services for voice and IP transit are now available on this network.

Its business services are going to be welcome relief to businesses who have been paying Telkom’s large prices for some time now:

Look forward to a telecommunications partner that will move your business ahead of the competition. Following the launch of national and international leased line services in December 2006, Neotel will, over the first few months of 2007, introduce a suite of leading-edge telecoms services for larger enterprises, including next generation voice and data services. To help manage business more efficiently, Neotel will offer world class managed services and hosting.

Neotel will also likely find open arms when it approaches consumers next year:

Neotel plans to introduce a variety of voice and data services (including high speed internet and broadband) for consumers in South Africa, with the first of these services targeted for availability in April 2007. However, consumers are already benefiting indirectly from the introduction of Neotel’s wholesale services through improved quality of international voice calls and more reliable internet bandwidth offered by their telecoms providers.

Ironically, Telkom is now upgrading its services and dropping its prices (as I anticipated) and users of Telkom’s 1MB ADSL service have been reporting that their connections are running as high as 4MB.  The only difficulty at the moment is that Telkom still imposes a cap on bandwidth which limits the appeal of this improved offering.

I think we will see better offerings from Telkom as he works to get ahead of Neotel but ultimately Neotel is going to have some pretty compelling offerings by next year.  Watch this space!