Photo: Leon Nicholas

Johannesburg - Neotel, the South African unit of India's Tata Communications, plans to spend R500-million on capital expenditure this fiscal year, its chief executive said on Wednesday.

South Africa's second-biggest fixed-line phone operator, which is 68.5 percent owned by the Indian firm, is looking to expand its network and make a dent in a market dominated by former state-run utility Telkom SA.

“Of our capex budget, 20 percent is earmarked for IT to bring automation and 80 percent is earmarked for network capability,” chief executive Sunil Joshi told Reuters following a company briefing.

“About a third of that is for keeping existing network running and two thirds is for expanding the fibre network,” he said, adding that 60 percent of the planned 500 million is already spent.

The company posted 10 percent growth in revenue for the first-half to September and earnings before interest, taxes, depreciation and amortization (EBITDA) - a measure of profit - nearly quadrupled, rising 276 percent.

Neotel said it added 18 percent more business customers to 2,400 and increased home users by 30 percent to 130,000.

“Considering that the market is growing at four percent, we are growing at two and a half times the market growth rate,” Joshi said. - Reuters