With the Reliance Communications – MTN deal struggling to take shape, Tata Comm. (formerly VSNL) is all set to get a majority stake in another South African telecom service provider Neotel.
Neotel (Pty) Ltd., previously SNO Telecommunications, is the much anticipated second national operator (SNO) for fixed line telecommunication services in South Africa.
Tata Communications has entered into an agreement with South African state-owned enterprises, Eskom and Transnet, to acquire their 30 per cent stake in Neotel, although the deal amount has been kept undisclosed.
Tata Communications already has a stake of 26 per cent in the South African company. The company along with Tata Africa Holdings will hold 56 per cent stake through this acquisition.
Tata Africa Holdings is their investment arm and has a strong presence in over 10 African countries with investments exceeding US$100 million. A subsidiary of Tata International — a global company with a turnover of US$1.6 billion — it was established in Johannesburg, South Africa, in 1994. The agreement will be finalized through a six-month period.
The other shareholders of Neotel include Nexus, Communitel, and Two Consortium.
Recently Tata Comm. announced that it has acquired 50% stake in China’s CEC, a Beijing based company. And now it has commenced its network expansion plans in Africa through an arrangement with Neotel, South Africa’s first converged communication network operator.
According to reports, South Africa and West Asia will comprise almost 16 per cent of the total global telecom market by 2010, following the emerging markets of China and India.
Source: The Hindu – Business Line
