Vodacom and the shareholders of Neotel have officially announced that they have entered into exclusive discussions regarding a potential acquisition of 100% of the shares of Neotel by Vodacom South Africa.  

The finalisation of this transaction is subject to the successful conclusion of commercial negotiations as well as receiving the requisite regulatory and corporate approvals.

According to Vodacom, this transaction would stimulate greater competition in the South African fixed telecommunications sector and accelerate the provision of high speed data links.

The operator added that if completed and approved, the deal will support government’s ICT priorities, which includes the boosting of investment in the next generation of telecommunications services as well as facilitating growth in the broader economy.

Vodacom’s preliminary plans

Speaking about the pending acquisition, Vodacom Group CEO Shameel Joosub said: “There are a number of important steps that we still need to complete in order to conclude the transaction. If the deal is implemented, Vodacom intends to put significant investment into the combined entity to provide high-speed fixed connectivity to many more businesses and consumers."

Joosub went on to say that Vodacom is going to develop new services the likes of fibre to the home and business by building on the capabilities within Neotel. This, as Neotel has access to more than 15 000 km of fibre-optic cable including 8000 km of metro fibre in Johannesburg, Cape Town and Durban.

Another crucial motivating factor for the acquisition is spectrum, with Joosub stating that the combined entity will be able to utilise this resource more efficiently and in so doing, keep pace with South Africa’s rapidly growing demand for mobile data.

To the point

Sunil Joshi, Neotel CEO, stated: “We believe this presents an exciting and attractive opportunity for all parties, especially our customers to whom we will be able to offer more meaningful and innovative products and services. This transaction, if concluded, would further enable Neotel to extend its footprint in South Africa and add the mobile capability that our customers require for their business’ growth in a new world of converged communications."

In related news, Vodacom recently kicked off the South African leg of the international App Star challenge, pitting the skills of local app developers against those from Egypt, India, Kenya and Tanzania.