Indian-owned telecommunication group Tata Communications now owns the dominant stake in Neotel, having finalised its purchase of the 30% interest that was jointly owned by state-owned companies Transtel and Easitel.
Tata Communications now owns a total of 56% of Neotel's shares with the other consortia Communitel, which consists of the MK Veterans Association and Namibia Telecoms, and Two Consortium, each owning 12.5%. Black economic empowerment investor Nexus owns the balance of 19%.
A Neotel statement issued yesterday says this now means Tata Communications, in association with Tata Africa Holdings, has become the controlling shareholding in the main rival to Telkom.
“This reaffirms Tata Communications' commitment to its expansion and investment plans in the emerging regions of Asia, Africa and the Middle East. We will support Neotel's efforts to provide global quality telecom services in SA,” says Srinath Narasimhan, MD and CEO of Tata Communications.
“With the current economic climate in SA, it is very encouraging to us that a global telecommunications giant continues to invest in SA and Neotel, in particular,” says Ajay Pandey, MD and CEO of Neotel.
”I firmly believe that such transactions reinforce international investors' confidence in the country and more specifically in the South African telecommunications market. Neotel's entry into the market and recent success is a clear indication of the growth potential in the industry.”
Panday says this transaction further allows Neotel to leverage Tata Communications' proven and vast global network of tried and tested technologies in countries such as India with similar telecoms landscape to SA.
He believes the consolidation in Neotel's shareholding will go a long way in strengthening the company's position as a stable player in the local market.
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