On Tuesday, Tata Communications announced the sale of its subsidiary South African communications network operator Neotel to Liquid Telecom and Royal Bafokeng Holdings for 6.55 billion rands ($429 million).
Liquid Telecom has partnered with a South African empowerment investment group Royal Bafokeng Holdings to take 30 percent equity stake in Neotel. Tata Communications of India and minority shareholders of Nexus Connection have in a joint statement said that the deal is transformative and will create the largest Pan-African Broadband network and B2B telecom provider.
The new holder of the company will be able to access Liquid Africa’s 24,000 km of cross-border, metro and access fiber networks. Currently, it spans to 12 countries from South Africa to Kenya and in the coming time, it will expand to more regions in the African province. In the future, Liquid Telecom will launch new products and services which will be aimed at African businesses.
For the first time through a single network, it will be possible for African countries to connect with each other in a cost efficient and reliable way.
In an official statement Tata Communications MD and CEO, Vinod Kumar said –
For the next phase of Neotel’s evolution, Liquid Telecom is the right partner. This transaction will encourage the growth and technological aspiration of the African continent.
Prior to this latest development, Tata Communication in March this year tried to sell majority of its stake in Neotel to Vodacom. But due to non-fulfillment of some of the conditions, the transaction was called off at the last minute.
The entire process of the transaction will be completed by the end of this year. Both Tata Communication and the new holders of the company are waiting for the approval by South African regulators.