Vodacom to buy Neotel for R7bn

2014-05-19 08:27

Vodacom has agreed to buy local Internet-provider Neotel from India’s Tata Communications for R7bn.

The transaction will be funded through available cash resources and existing credit facilities, Joburg-based Vodacom said today.

Vodacom is increasingly focused on small- to medium-sized business customers and expanding data services to offset declining revenue from its domestic voice division. Neotel would help Vodacom add Internet users as it competes against Telkom and MTN, Africa’s biggest mobile-phone company.

Mobile operators around the world are turning to fixed-line assets that allow them to sell a wider range of services and carry data traffic more efficiently.

Vodacom’s parent, Newbury, England-based Vodafone Group Plc, last year bid for Kabel Deutschland, a German fixed-line telephony, cable TV and Internet-access service provider.

Vodacom also said full-year earnings increased 2.8% and the number of active customers rose 14% to 57.5 million as the company added subscribers in South Africa and its international markets.

Net income increased 1.9% to R13.2 billion.

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