Vodacom finalizes Neotel deal with Tata Communications

Vodacom, a subsidiary of Vodafone, has agreed to acquire Neotel, a telecom network operator in South Africa, from Tata Communications – after two years of negotiations.

Financial details were not disclosed.

The deal will include majority of Neotel’s fixed-line business, but excludes spectrum and licenses. As part of this agreement, Neotel will offer a roaming arrangement to all the mobile network operators, including Vodacom, said Tata Communications in a regulatory filing on Tuesday.

Neotel is South Africa’s second-biggest fixed-line phone operator. Tata Communications acquired the Neotel stake in 2006. Nexus Connection and Communitel are the other investors in Neotel.

In May this year, Tata Communications – owned by Indian business major Tata group — agreed to sell its entire 68 percent stake in Neotel to Vodacom, under a 7-billion-rand agreement.

The Competition Tribunal in South Africa will look into the anti-trust issues on December 10, 2015.

The deal will require Indian government’s approval as the center holds a 26 percent equity stake in Tata Communications. In 2006, Tata Communications acquired the Neotel stake, following the South African government’s initiatives to deregulate the telecom market, for $250 million.

Tata Communications does not have any mobile and fixed line business in other countries.