Johannesburg, 3rd March 2015 — OTEL Telecoms has entered into a merger agreement with MCD Group to acquire a controlling stake in OTELs national network.
Under the terms of the agreement, MCD Group will purchase substantial shareholding in order to provide additional resources and experience to OTEL’s ever growing wholesale and reseller base. The objective is to grow OTELs current dealer distribution channel, apply strategic changes that will see OTEL grow its national fibre network, and add presence in the enterprise, SME and retail environments.
Since converting its licence in 2008 to IECNS, OTEL Telecoms has grown steadily to become a reputable infrastructure service provider to ISPs, PBX Resellers and ICT Companies in Southern Africa. The Internet and VoIP industry has experienced tremendous advancements in the past few years with OTEL playing an instrumental part in the changes whilst laying a solid foundation for future growth.
MCD Group has expanded its cellular retail operations to key retail stores in major shopping centres nationwide in its 17 years of existence.
MCD’s tabled plans is to create a more structured distribution channel to grow its enterprise and SME footprint. The groups’ substantial experience gained in managing a well-known cellular retail brand will aid in establishing a number of retail stores in major shopping centers to promote, sell and service clients with converged broadband and telecommunication services nationally.
Outgoing CEO of OTEL Telecoms, Mohammad Patel, comments “ We have reached a stage where more resources and experienced manpower is required to increase and manage the company’s deployment of a national fibre network and its dealer base. MCDs’ expertise in strategic vision, operational, tactical, and financial structures fits hand in glove to take the company to the next level.”
As incoming CEO of OTEL Communications, Rad Jankovic is upbeat about the future at OTEL. “ We’ve found excellent synergies since the first meeting last year. OTEL is well placed to establish a strong presence in the enterprise, SME and retail sector whilst continuing to grow its wholesale operations and core network. The technical expertise and automated processes at OTEL are second to none. We are building this company around not only solid technical fundamentals, but even more importantly around experienced sales, customer care operational teams that will be able to leverage of this technical base and generate strong sales and revenue growth.”
Whilst talks has been on-going for months, the acquisition will occur on the 1st of March, delayed to due to various due diligence processes as well as awaiting clearances from relevant government institutions.
“Our acquisition of OTEL gives us a unique opportunity to offer broadband connectivity to a broadband hungry South African market.” says Ameet Bagoon, CFO of OTEL Communications. “OTEL is a good long-term growth opportunity, with manageable near-term cash flow and capital expenditure requirements.”
In recent months, the telecom industry has been undergoing many mergers and acquisitions as the ICT industry consolidates. We do believe there is ample room for smaller, innovative and customer-experience focused operators who are able to react quickly, effectively and efficiently to this continuously changing and dynamic business environment.
Patel adds: “I’ll be retaining a position in the company as CTO. We’re keeping everything in place to continue the good work carried out by OTEL’s wholesale team.”
OTEL Communications have already created a dedicated team for the implementation of a distribution channel, sales and customer care strategy, headed up by an experienced management structure led by Rad Jankovic and 20 year industry veteran Peter M’Crystal, who will take up the sales director role.
Jankovic concludes: “The South African telecoms industry will benefit from more competition to the incumbents services thus lowering broadband prices and increasing broadband speed using FTTx. OTEL Communications will be converging voice, ADSL, VDSL, and LTE into a one stop shop with a personalised face to face service approach using its national dealer and retail footprint.”