Telecom Finally Sells Shares in Neotel

TELECOM Namibia has finally sold its stake in South African based telecommunications company, Neotel.

Frans Ndoroma, MD, Telecom Namibia, said yesterday that as part of the Neotel sale to Vodacom, Telecom Namibia as a minority shareholder will relinquish its involvement in Neotel. The transaction between Neotel and Vodacom is valued at N$7 billion, which makes Telecom’s 12,5% stake to be valued at N$875 million.

Catherine Beukes-Amiss, the chairperson of the Telecom Namibia, said the development is positive as it will enable Telecom to now focus specifically on the local Namibian market.

The structure of the deal and its commercial terms remain subject to regulatory and competition authority approvals and the parties will be immediately commencing the necessary processes in that regard.

The shareholders of Neotel and Vodacom SA have announced on Monday that they concluded an agreement on the commercial structure and terms to proceed for Vodacom to acquire 100% of the shares of Neotel.

Vinod Kumar, MD and CEO of Tata Communications said Tata Communications was pleased with the outcome of the deal.

“It is in line with our financial objectives while paving the way for Neotel to improve its value proposition in the South African market.”

Sunil Joshi, CEO of Neotel said the firm was encouraged by the progress made to date and will focus now on ensuring compliance with the regulatory approvals processes and the engagement with the competition authorities.

“Neotel continues to grow in the South African market and with this, when approved, will enable a greater choice of product and services for our customers and increased competition, while Neotel continues to deliver improved services and grows its customer base.”

Kennedy Memani of Nexus Connexion said the transaction will impact the landscape of the telecommunications industry in South Africa. “We believe it will enhance the customer experience and benefit the South African public.”

Telecom announced in July 2011 that it was going to sell stakes in Neotel and Mundo Statel of Angola, in order to concentrate on the local market. Close to nine years ago, Telecom made US$80 million investments in Neotel and Mundo Startel in hopes of capturing the Southern African telecom market. But in 2011, Telecom said the investments had not been profitable. Telecom had a 48% stake in Mundo Startel. The partnership between Telecom Namibia and Mundo Startel was expected to result in the deployment of 100 000 wireless lines providing voice and high speed data services throughout Angola’s capital Luanda before extending the services throughout the country.

Source : The Namibian