O-Tel Telecoms, a Fax over IP (FoIP) and internet telephony services provider, is reassessing its growth strategies in the wake of increased merger and acquisitions activity in the South African telecommunication sector. The company said acquisitions are not unusual for the industry, and is in fact a common means for telecommunications providers to expand services and enlarge customer bases.

 “Mergers and acquisitions enable companies to increase their scale, reduce costs and improve their access to capital, equipment, valuable skills and expertise – which in turn increases profits and service levels,” said Mohammad Patel, CEO of O-Tel Telecoms, in a company statement. “These factors have led many industry participants, from small cap to large cap, to discover growth opportunities from both inside and outside M&A transactions as they work to increase shareholder value.”

O-Tel has recently completed an acquisition of its own, purchasing Rheid Communications last year. 2011 also saw Reunert acquire ECN in order to expand the customer base of its Nashua Mobile LCR unit.

These deals highlight the value that telecommunications company’s place on growth through acquisition, O-Tel Telecoms said.

 “You need to have scale to be able to bear the risks that you are going to need to be able to deploy cloud services, inter-connect, increase subscribers, changing LCR income, etc,” Patel said in the statement. “It also helps companies diversify their portfolios by finding a complementary firm and increasing overall scale.”

O-Tel provides its subscribers with an array of VOIP services, such as 1Cloud Hosted PBX (News - Alert), SIP Trunking and Fax over IP. It’s also in the final stages of completing a new Centrex Cloud Call Centre, whose services will be offered initially to a select group of business partners in the PBX, IT service, LCR, wireless and ISP fields across South Africa. O-Tel Telecoms’ VOIP services are securely backhauled into the company's national MPLS infrastructure and the company has created an enterprise internet breakout facility allowing maximum usage of the backhaul link.

“Since 2008, O-Tel has constantly been upgrading its network to meet thousands of clients' demands. O-Tel currently possesses a respectable and stable carrier-grade network, which has cost much money and time to establish. To maximize return on investment (ROI), we need to rapidly add more users to our already sizeable database,” Patel said.

He noted that O-Tel Telecoms was considering a number of options, including other PBX/LCR firms with established databases, or merging with “a larger company that has a substantial dealer database and wishes to add more value by offering cloud telecoms services.”

“There's an exciting time ahead,” he finished. “We've already been in talks with various JSE-listed companies, but O-Tel's exploration is focused on acquiring or merging with companies that share a similar vision of rocketing the local telecoms industry into 'the cloud' by offering cloud-based telephony services via a national partner/reseller network.”