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Vodacom acquires Tata Communication’s Neotel for $676.45 million

vodacom-neotelTata Communications has informed BSE (pdf) that its wholly-owned Africa based subsidiary Neotel has been sold to Vodafone-owned Vodacom for ZAR 7.0 billion ($676.45 million). The companies had entered into exclusive discussions in October last year.

Neotel provides value-added voice, internet and data services for businesses, wholesale network operators and providers and retail customers, and connects the major centres in South Africa to each other and to the world, directly linking its infrastructure into Tata Communications’ network. Its fibre network of over 15,000 km spans Johannesburg, Pretoria, Durban, Cape Town, Pietermaritzburg, Port Elizabeth and traverses approximately 30 other cities, towns and villages in South Africa.

As per Tata Communications Q4-FY14 results (pdf), Neotel capital expenditure (cash view) for the financial year was ZAR 523 million ($50.54 million). Startup business, which included both Neotel and United Telecom Limited (UTL) Nepal, had operating revenues of Rs 636 crore for Q4-FY14 and Rs 2,168.7 crore for FY14. This division also reported a profit after tax after minority interest of Rs 26.2 crore in Q4-FY14 and a loss after tax after minority interest of Rs 2.7 million.

There was also a writeback in network cost with regard to Neotel of Rs 33.7 crore in FY14, from the third quarter of the financial year.


2008 July: Alongwith Tata Africa, Tata Communications acquired 56% stake in Neotel. Tata Communications acquired 30% of this stake from Eskom and Transnet.

2011 June: Tata Communications increased its stake in Neotel from 49% to 61.5% in 2011.

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