Tata ups stake in Neotel; Vodacom may join fibre project

20 Jan 2009

India’s Tata Communications has increased its stake in South Africa’s second national operator (SNO) Neotel by 30%, acquiring shares from government-backed entities Eskom and Transnet. Tata Communications and its local operating arm Tata Africa Holdings now have a majority shareholding in the SNO. ‘We will support Neotel’s efforts to provide global quality telecom services in South Africa,’ said N. Srinath, the managing director and CEO of Tata Communications. Ajay Pandey, MD and CEO of Neotel, commented: ‘This transaction further allows Neotel to leverage on Tata Communications’ proven and vast global network of tried and tested technologies in countries such as India with similar telecoms landscape to South Africa.’

Separately, South African cellular operator Vodacom is reportedly lining up to participate in a ZAR2 billion (USD197 million) 5,000km national fibre-optic cable project involving Neotel and rival mobile firm MTN which was announced last week. Vodacom is thought likely to join the partnership once fixed line operator Telkom has divested its 50% stake. One source close to the deal told local newspaper Business Day: ‘Vodacom will join in the collaboration. It can’t at the moment because it has Telkom as a shareholder, but they are going through the divorce.’ Vodacom had been planning to deploy its own national fibre network, but joining with Neotel and MTN will offer significant savings on rollout costs.