Transtel, The telecommunications arm of Transnet, has a Value Added Network Services (VANS) licence, allowing Transnet to leverage its telecoms network to compete for the business of non-group companies as well. Transtel Telecoms has been carved out of Transtel, as a separate division catering to the commercial telecommunications services provided by the company, and excludes only the Transtel's core rail and harbour operational communications services required to support the transport operations of Transnet, which remain within Transnet.

Neotel's acquisition of Transtel Telecoms, a profitable division in its own right, will bring with it favourable annual revenues from its various enterprise customers and a substantial telecoms infrastructure. Transtel Telecoms, which has an employee strength of 500 people, is amongst the few employers of voice and data carrier telecom skills in South Africa, and hence Neotel will gain from the pool of, otherwise scarce, skills in these fields.

Ajay Pandey, MD of Neotel says "We are committed to exploring various options to ensure a faster entry into the market. This acquisition provides us a platform for introducing our next-generation services for businesses, providing us a nation-wide presence instantaneously, and therefore the ability to serve the diverse and geographically dispersed needs of our customers."

Karl Socikwa, Head of Restructuring at Transnet, said "As part of its four-point turnaround strategy, Transnet is focussing it's efforts on the deployment, operation and maintenance of an efficient freight transport business with specific focus on rail, port and pipeline infrastructure and operations. All other businesses are being disposed of by the Group. The disposal of Transtel Telecoms forms part of this non-core business disposal strategy".

The transaction is subject to various regulatory approvals, including the Competition Commission.

About Neotel:
Neotel is the first national infrastructure-based competitor in the fixed line telecoms sector in South Africa. The company aims to reduce the cost of doing business by enhancing the operational efficiencies of companies through the optimal use of advanced communications technologies, and to extend these benefits into the second economy. Much has changed in the telecoms market in recent months, in South Africa as well as globally. Recognising the changing requirements of telecoms users in South Africa, Neotel is building itself to be a preferred provider of leading-edge telecommunications, well beyond the traditional concept of a fixed line operator. Its various telecom licences, including the PSTS Licence issued to Neotel as the second national operator of South Africa, allow the company to provide the entire range of telecoms services with the exception of full mobility.