Tata Group to sell Neotel to Vodacom

South African mobile operator Vodacom Group and Neotel have announced that they have entered into exclusive discussions regarding a potential acquisition of 100 percent of the shares of Neotel.

Neotel is the South Africa's second-biggest fixed-line phone operator, is 68.5 per cent owned by Tata Group of India - through VSNL and Tata Africa Holdings Pty (Ltd).

"The finalisation of the transaction is subject to the successful conclusion of commercial negotiations and receiving the requisite regulatory and corporate approvals," the company mentioned in its statement.

"This transaction, if concluded, would stimulate greater competition in the South African fixed telecommunications sector and will accelerate the provision of high speed data links. It would also result in the combined entity being able to offer an expanded product range and, as a consequence, enhanced customer choice,"it said.

"By further building on the capabilities within Neotel, we would also aim to develop entirely new services such as fibre to the home and business. Neotel has access to over 15,000km of fibre-optic cable, including 8,000km of metro fibre in Johannesburg, Cape Town and Durban," said Vodacom Group CEO Shameel Joosub.

"We believe this presents an exciting and attractive opportunity for all parties, especially our customers to whom we will be able to offer more meaningful and innovative products and services. This transaction, if concluded, would further enable Neotel to extend its footprint in South Africa and add the mobile capability that our customers require for their business' growth in a new world of converged communications," said Sunil Joshi, Neotel CEO.

He further added, "If completed and approved, this transaction will support Government's ICT priorities to increase investment in the next generation of telecommunications services and facilitate growth in the broader economy."