Vodacom confirms in talks to buy Neotel
Recent speculation over whether JSE-listed Vodacom would buy telecommunications group Neotel were confirmed on Monday as both parties announced that “exclusive discussions” were under way.
Vodacom planned to buy the converged operator and inject “significant investment” into the combined entity to provide high-speed fixed connectivity to many more businesses and consumers, Vodacom Group CEO Shameel Joosub said.
The acquisition would also allow Vodacom access to Neotel’s spectrum, which the JSE-listed group believed would stimulate greater competition in the fixed telecommunications sector and accelerate the provision of high speed data links.
“Spectrum is also an important consideration, as the combined entity could use this resource more efficiently and, in doing this, we can keep pace with South Africa’s rapidly growing demand for mobile data. This transaction is all about providing greater choice and better infrastructure for South Africa’s businesses and consumers,” Joosub said.
The merging of the two groups would also allow Vodacom and Neotel to jointly expand the product range and enhance customer choice, including new services such as fibre to the home and business.
Neotel has access to over 15 000 km of fibreoptic cable, including 8 000 km of fibre in metropolitan Johannesburg, Cape Town and Durban.
“This transaction, if concluded, would further enable Neotel to extend its footprint in South Africa and add the mobile capability that our customers require for their business’ growth in a new world of converged communications,” Neotel CEO Sunil Joshi added.
The deal was subject to the successful conclusion of commercial negotiations and receiving the requisite regulatory and corporate approvals.
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