WINDHOEK – South Africa’s Vodacom Group is in exclusive talks to buy Neotel, South Africa’s second fixed line operator. Shareholders in Neotel include Telecom Namibia, which has interests in the consortium CommuniTel, together with South Africa’s liberation veterans, Mkhonto We Sizwe.
Other shareholders in Neotel are India’s Tata Communication and another consortium Nexus Connexion. Neotel was created in 2006 after a protracted bidding process to provide competition for South Africa’s incumbent operator Telkom. In a joint statement issued on Monday, Neotel and Vodacom said the deal has the potential to stimulate competition in South Africa’s fixed-line and broadband data services markets. “If the deal is implemented, Vodacom intends to put significant investment into the combined entity to provide high-speed fixed connectivity to many more businesses and consumers. By further building on the capabilities within Neotel, we would also aim to develop entirely new services such as fibre to the home and business. Neotel has access to over 15 000km of fibre optic cable, including 8000km of metro fibre in Johannesburg, Cape Town and Durban,” said the statement.
Vodacom, a unit of Britain’s Vodafone Group is the most popular mobile carrier in South Africa, but has little presence in fixed-line and fibre-optic services, which are both key to winning business clients. “The benefit they would gain is an expanded client base in the fixed-line market segment,” said Dobek Pater, an analyst at consultancy firm Africa Analysis. “They would gain access to fibre footprint and spectrum, and probably some additional skills to augment their current skills base.” Vodacom chief executive officer Shameel Joosub said the company would aim to deliver more high-speed Internet to homes and businesses. Neotel, which has mainly small and medium-sized businesses as its clients, has invested some N$7 billion in developing infrastructure, Pater said. South Africa’s fixed-line market is dominated by former utility Telkom, which is still partly owned by the government and has plans to roll out broadband Internet in rural areas. Vodacom said it was looking to acquire 100 percent of Neotel and any shareholder loan claims. It did not give a potential value for the deal. – Additional Reporting by Nampa/ Reuters
By Staff Reporter