Neotel announced its financials for the year, showing off an impressive 21% growth in revenue and, for the first time since it started seven years ago, a profit before tax.

Neotel’s MD and CEO, Sunil Joshi, was vocal about the fact that the company has managed to reach its financial growth targets in each of the last three years, and managing to exceed the targets set for this year. Neotel says that it had sustained growth of  “27% in the Small Enterprise/Retail segment and 24% in the Business segment.” This is fantastic for its bottom line, but proves that the second national operator is far from the force of change in the consumer telecoms space – something South Africans hoped for when it launched in 2006.

Just one month ago Vodacom announced its intention to buy Neotel outright in a bid rumoured to be in the region of R5-billion, although Joshi declined to comment on this during the earnings presentation. The deal would see Vodacom adding a substantial amount of revenue to its business unit but, more importantly, gaining valuable chunks of radio spectrum. Neotel has been licensed spectrum by ICASA in the 1 800MHz range, and Vodacom could use to bolster its current LTE offering. Neotel also has a license for the 800MHz spectrum, making it and Sentech the only two companies with access to that frequency. The 800MHz spectrum can be used to rapidly roll out high speed data services, like LTE, across rural areas of South Africa, due to its ability to broadcast a stronger signal over long distances.