Neotel's Gloves Are Off

Neotel CEO and MD Ajay Pandey is to leave the local telecoms operator, and probably the country, when his five-year contract expires in March.

This is according to sources within the company and close to its board, who say a successor has already been identified.

The embattled telecoms operator is undergoing a realignment process as a result of its continued dismal performance.

Its latest annual report, for the year ended 31 March 2010, reveals its independent auditor Deloitte & Touche has serious misgivings about the local operations.

“The company's recurring losses from operations and shareholders' deficit raise substantial doubt about its ability to continue as a going concern,” says partner Andre Dennis in the report.

The 2010 financial year saw the company deliver a R1.1 billion loss. This was a 50% increase on its R739 million loss in 2009, which in itself was a 130% increase on its 2008 loss of R320 million.

What's more, the company has yet to near its 2006 stated target of capturing 15% of Telkom's client base within five years. Last year, Pandey revealed the company expected to have around 50 000 subscribers at the cut-off of its 2011 financial year. This is 1.25% of Telkom's four million subscribers.

In early January, it confirmed it may retrench staff as the company is not performing in line with expectations. Neotel said staff consultation will start in mid-January, and some jobs will be made redundant.

Solidarity and the Communication Workers Union later declared they would fight tooth and nail to protect members from the proposed retrenchments.

Source :

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