Tata Comm concludes deal to sell Neotel fixed line to Vodacom

Financial details were not disclosed.

The two companies had entered into exclusive talks for due diligence pertaining to the deal in 2013.

After trying to buy network and business service specialist Neotel for well over a year, and setting aside R7 billion for the transaction, mobile operator Vodacom has today announced that the deal will go ahead, but it will only acquire “the majority of” Neotel’s fixed line business assets and not its spectrum licenses. The structure of the deal, worth $675 million when originally announced, and its commercial terms were subject to regulatory and competition authority approvals.

Vodacom (OTC:VODAF) has made amendments to its 7B-rand (about $481M) purchase of Internet provide Neotel in a move that could mollify nervous competitors over the deal.

Last month, Tata Communication said the proposed deal to sell South African communication venture Neotel, in which it owns 67.32 per cent, for an enterprise value of ZAR 7 billion (just under $500 million) is being renegotiated.

Other South African operators have expressed concerns about the deal, since it brings together the country’s largest mobile operator with its second fixed-line national operator.

Furthermore, Vodacom and Neotel annopunced on Tuesday that Neotel will offer a roaming arrangement to all the mobile network operators including Vodacom South Africa.

With the companies inking a deal now, the Tribunal will now look into the anti-trust issues on December 10, 2015.

It is one of South Africa’s leading converged communications network operators.

Tata Communications is a leading global provider of a new world of communications.

Vodacom’s decision to make the spectrum available to rivals, will help them accelerate deployment of the super-fast 4G network infrastructure, which requires the type of spectrum that Neotel already has.