Tata Communications Limited (TCL) has informed the Bombay Stock Exchange (BSE) that its shareholding in Neotel has increased from 49% to 61.5%. The company has purchased additional 12.5% stake which was previously held by Two Telecom Consortium (2TC). Consequently, Neotel becomes a direct subsidiary of Tata Communications. The other shareholders of Neotel are Nexus Connexion and CommuniTel.
Neotel, which is a South African telecommunications services provider, offers fixed-line and internet services in the region. The company of late has not been doing particularly well financially and accounted for Rs 551 crore of the total loss suffered by Tata Communications in the financial year ended 31st March 2011.
According to TechCentral, Neotel wants to expand its subscriber base by 50% in the on going financial year. It intends to spend funds on new wireless base stations to enhance its coverage area. Neotel has allocated about R500 million (Rs 325 crore approx) for capital expenditure in 2012, part of which will be utilized for enhancing its consumer offerings.
Meanwhile Tata Communications is working towards reduction of networking cost, increase productivity gains and provide managed services to small and medium scale enterprises.