Indian telecoms firm Tata Communications has announced that it has increased its effective shareholding in South African fixed line telecoms provider Neotel from 49% to 61.5%. The 12.5% stake in question was acquired from Two Telecoms Consortium (2TC), although no purchase price has been disclosed. Following the stake increase, Neotel will function as a subsidiary of Tata Communications. Neotel CEO Sunil Joshi commented: ‘We welcome the investment from Tata Communications and are reaffirmed by the continued support from all our shareholders’.
According to TeleGeography’s GlobalComms Database, Neotel was granted a 25-year PSTN operators licence in December 2005, making it the country’s much anticipated second national operator (SNO), and breaking up incumbent Telkom’s longstanding monopoly. At the time of its launch however, the operator did not own any network infrastructure and was forced to operate via a wholesale agreement with Telkom for its first year of operations. The wireline provider has been dogged by numerous problems since its inception, and in August 2010 former CEO Ajay Pandey admitted that Neotel had ‘failed’ the consumer market, and rather than prioritise improving its poor residential uptake would instead seek to embrace the more lucrative enterprise market.