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SA Vodacom close to acquire Neotel for USD 432mn -report [IntelliNews - Weekly Reports](IntelliNews - Weekly Reports Via Acquire Media NewsEdge) The Wall Street Journal (WSJ) quoted an unnamed executive from Indian Tata Telecommunication Ltd., saying that Tata is close to sell its South African unit Neotel to British Vodafone's South African unit Vodacom Group Ltd. for a consideration of INR 26bn (USD 432mn). South Africa's largest mobile operator Vodacom will also take over Neotel's debt. Tata decided to sell Neotel since it has not enough funds to support Neotel's expansion plans. Neotel plans to expand its services into new areas such as high-speed internet and cellular networks. Tata expects to disclose the deal within two months and the deal will be subject to the required approval from the South African telecommunications and anti-trust authorities, according to the unnamed executive. WSJ also reported that Tata and Vodafone have been in talks since the last September. Spokesperson of Vodacom Group and Vodafone Group confirmed that the talks are in advanced stages, according to WSJ. Tata controls a 67% stake in South Africa's second-biggest fixed-line phone operator Neotel. Communitel, which is partly owned by Telecom Namibia, owns a 12.5% stake and Nexus Connection, the company's black empowerment partner, owns the balance. Neotel provides wholesale telecommunications and internet services to companies operating in Africa. Neotel has a customer base consisting of 152,000 subscribers and employs 1,000 employees. Neotel was launched in 2006 after winning a licence to compete with former fixed-line monopoly Telkom and build a second phone network. The company operates an over 15,000-km fibre optic network that offers voice, data and Internet via a single connection to businesses and households. In October, Vodacom, 65%-owned by UK Vodafone, said it was seeking to acquire 100% of local converged telecommunications network operator Neotel. JSE-listed Vodacom said in a bourse filing that it had entered into exclusive discussions with the shareholders of Neotel "to consider the possible acquisition of 100% of the issued share capital in and shareholder loan claims against Neotel". The statement confirmed previous media reports, which had valued a potential deal at about USD 590mn. Vodacom noted that the finalisation of the transaction is subject to the successful conclusion of commercial negotiations and receiving the requisite regulatory and corporate approvals. The acquisition of Neotel would be a major boost to Vodacom's ambitions to grow its data business in South Africa. Vodacom CEO Shameel Joosub said that if the deal goes through, Vodacom would put significant investment into the combined entity to provide high-speed fixed connectivity to many more businesses and consumers. It would also aim to develop entirely new services such as fibre to the home and business. Vodacom's total revenue for Q4/2013 grew 6.6% y/y to ZAR 16.5bn boosted by 26.9% y/y growth in equipment revenue, which contributed 21.6% of the total income for the period. The company's service revenue rose 0.6% y/y to ZAR 12.6bn in its fiscal Q3.Vodacom's active customer base expanded by 5.1% y/y to 30.96mn at end-December, with active prepaid clients increasing by 5.7% y/y to 26.12mn and those signing contract rising by 1.7% y/y to 4.8mn. (c) 2014 Emerging Markets Direct Media Holdings LLC Provided by Syndigate.info, an Albawaba.com company |