Tata Communications of India announced it has entered into an agreement to sell its South African business unit Neotel to Liquid Telecom for an estimated ZAR6.55 billion.
Nexus Connexion, which is a minority shareholder in Neotel, has also consented the deal.
Liquid Telecom is a privately owned, pan-African telecoms group, predominantly owned by Econet Wireless Global.
Liquid Telecom is joining forces with Royal Bafokeng Holdings (RBH) which is a South African empowerment investment group which will acquire 30% equity stake in Neotel.
The transaction, upon regulatory approval, will lead to the largest pan-African broadband network and B2B telecoms provider.
African organizations will be able to access Liquid Africa’s 24,000 kilometers of cross-border, metro and access fibre networks through a single access point.
The current territory limits to 12 countries from South Africa to Kenya, with expansion on the cards.
“Leveraging the strengths of RBH, Neotel and Liquid Telecom will offer an unprecedented fibre network with a unique set of services and international connectivity for telecom operators and enterprises
across sub-Saharan Africa,” said Nic Rudnick, CEO, Liquid Telecom.
Rudnick further said Liquid Telecom will also be increasing investments into Neotel to cater for rapidly accelerating mobile and enterprise traffic, enabling us to launch exciting new products and services.
“Convergence of technologies and services will be the key driver of growth across the globe and this transaction will encourage inclusion and support the growth aspirations of the African continent.” added
Vinod Kumar, Managing Director and CEO, Tata Communications.
Tata Communications had planned to sell majority hold of its subsidiary Neotel to Vodacom, South Africa, in March; but the agreement did not work out owing to regulatory complexities.