Sale Of Tata Led Neotel Will Boost Telecom Across Africa: Liquid Telecom

"Through a single access point, businesses across Africa will be able to access 40,000 km of cross-border, metro and access fibre networks. These currently span 12 countries from South Africa to Kenya, with further expansion planned," Liquid Telecom (LT) said in a statement after the Neotel deal worth USD 430 million (South African Rand 6.55 billion) was signed yesterday.

The sale, which is still subject to regulatory approval, ended a long chapter in the history of Neotel after Vodacom, South Africa's biggest mobile phone company, abandoned a two-year battle to buy Neotel in March this year, citing the deal's regulatory difficulties.

Tata Communications had put Neotel on the market as it attempted to reduce the group's debts and non-core assets.

Neotel was granted a licence a decade ago amid hopes of fixed line costs coming down as it competed with state provider Telkom as the only fixed-line operator in South Africa, but has not made huge inroads in that regard.

"For the first time, African companies will be able to connect with each other in a cost effective and reliable way, all on a single fibre network," said Nic Rudnick, Liquid Telecom's chief executive.

"We will also be increasing investments into Neotel to cater for rapidly accelerating mobile and enterprise traffic, enabling us to launch exciting new products and services," Rudnick said.

Neotel is the only telecommunications company that brings together voice, data and Internet over its own fixed infrastructure, using five undersea cables coupled with a network of optical fibre and wireless services.

Analysts believed that the 30 per cent stake in the deal taken up by Royal Bafokeng, a South African black empowerment investment group, will ease the passage through the regulatory process in South Africa.

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