Vodacom, Neotel merger deal collapses

2 Mar 2016

South African telco Vodacom has announced that it has decided to call off its planned ZAR7 billion (USD566 million) takeover of domestic rival Neotel from its majority owner Tata Communications of India due to ‘regulatory complexities’. As previously reported by TeleGeography’s CommsUpdate, under the original deal – signed in May 2014 – Vodacom agreed to acquire Neotel’s fixed assets, in addition to its spectrum and licences, though the deal was restructured in December 2015 following the opposition of rival operators; under the updated agreement, Neotel’s spectrum and concessions were to be excluded from the transaction. Shameel Joosub, CEO of Vodacom Group said: ‘It is disappointing that we have reached this conclusion despite all our efforts to find a way to deal with the complexities of the restructured transaction. Our ambition to increase the rollout of fibre-based broadband services to customers remains. We will continue to look for spectrum opportunities, as well as opportunities to accelerate our fixed line business.’

Meanwhile, Neotel’s parent Tata said in a press release that it ‘remains committed to its investment in Neotel’, adding that it will ‘focus on customers, partners and employees in South Africa while providing the highest levels of customer service’.

South Africa, Liquid Intelligent Technologies South Africa, Tata Communications, Vodacom Group, Vodacom South Africa