Vodacom in talks to buy Neotel
South African mobile incumbent Vodacom could be considering acquiring ISP Neotel for over 5 billion rand (€366.1 million), as it shifts its focus towards business and fixed-line services.
Vodacom is in exclusive talks to buy Neotel from its majority owner, Tata Communications, a source close to the negotiations told Bloomberg.
Vodacom is a 65%-owned subsidiary of Vodafone. The company leads the South African mobile market, but is increasingly turning to data services and SMB customers to make up for declining domestic consumer voice revenue.
The company is reportedly also interested in Neotel's fixed-line assets to bolster its mobile network and allow it to sell a wider range of services.
Tata Communications owns around two thirds of Neotel. Its most recent transactions to increase its Neotel stake would value the ISP at $596 million (€441.6 million).
According to the report, while Tata booked a consolidated net loss on its Neotel stake of around $45.3 million in its most recent financial year, the ISP was ebitda positive for the first time.