As converged communications network oper-ator Neotel continued its “consistent” year-on- year growth, MD and CEO Sunil Joshi said last month that Vodacom’s buy-out of the Tata Com-munications subsidiary would give it “greater scale and investment” – and the capability – moving into the future.

Telecommunications giant Vodacom recently concluded an agreement for the 100% buy-out of Neotel for R7-billion, with CEO Shameel Joosub stating that the subsidiary and its employees would now be absorbed into Vodacom’s fixed enterprise business to operate as a standalone business.

And while Neotel’s growth and year-end results were “good”, Neotel required the Voda-com transaction, which was expected to be completed by the end of the year, to accelerate scale and investment.

“The transaction with Vodacom is very import- ant for Neotel’s future and when [it’s] approved, [the absorption into Vodacom] will enable Neotel to offer a broader suite of products and services to its customers by combining fixed-mobile convergence technology solutions and an infrastructure of scale across South Africa,” Joshi said.

The combined entity also was expected to increase competition in the industry and compete more effectively against the incumbent, besides others.

Neotel invested R500-million in capital expenditure last year – with another R500-million set aside for the 2015 financial year – and the cumulative investment since inception in 2007 reached R5.8-billion.

Vodacom’s financial backing would enable the company to extensively scale up network and infrastructure investment in future, Joshi noted.

However, while the regulatory and competi-tion approval processes were under way, it would be “business as usual” as Neotel exec-uted its 2015 financial year strategy.

The group, which ended the year with 9 000 km of metropolitan fibre and 16 500 km of national fibre, would remain focused on con- tinuing its strong growth trajectory and ensur- ing a sustainable path to profitability, expanding its network footprint and continuing to develop innovative technologies, while growing its market presence in the large and medium-size enterprise, government and small enterprise and retail segments.

Neotel CFO Steve Whiley said the year ended March 2014 saw earnings before interest, taxes, depreciation and amortisation double to just over R1-billion, while the company’s profit before tax turned positive, ending the year under review at R87-million.