Vodacom said to be showing interest in Neotel

Vodacom is reported to have entered into exclusive talks to buy South Africa’s second landline network operator, Neotel from its Indian owners.

Vodacom had previously been said to be the last company running its eye over Neotel’s accounts after rival MTN dropped out of bidding.

The advantage for Vodacom apart from Neotel’s own new LTE network and radio spectrum would be access to a much larger landline network for backhaul and to cross sell to corporate users.

A deal to buy Neotel is expected to be worth around US$500 million, according to Bloomberg News, who cited an unnamed person familiar with the talks.

Neotel is majority owned by Tata Communications, which bought their initial stake in 2008 and have slowly built it up to 67.3 per cent as of this March 2013.

Vodacom is 65 per cent owned by Vodafone, with the rest of its shares listed locally.