Tata boosts Neotel stake

2009-01-19 00:00

The India-based multinational Tata Group has effectively become the major shareholder in the converged communications network operator Neotel, increasing its stake from 26% to 56%.

Speaking at a briefing in Durban yesterday, Neotel CEO Ajay Pandey said the move means that Neotel will be able to leverage the strengths of Tata Communications for the growth of the company.

The Tata Group, through Tata Communications and Tata Africa, effectively acquired the additional 30% stake from state-owned enterprises Transnet and Eskom.

“Tata Communications is a global company … with almost $2 billion [R20 billion] of revenue. It has over 8 500 people spread over 39 countries. It’s among the top three players internationally on submarine cables and data connectivity,” said Pandey.

BEE group Nexus Connexion (19% stake) and two consortia (each holding 12,5%) are the remaining shareholders.

Locally, Neotel has almost quadrupled its wireless coverage area in KZN in recent months and has invested about R450 million in the province.

Although unable to provide a “concrete” date, Pandey told The Witness that there are plans to provide Pietermaritzburg with coverage.

Certain major national centres have already been covered, enabling consumers to buy NeoConnect, a high-speed Internet access and telephone package.

“That would be the logical next step now. Maritzburg and Richards Bay are the two next targets. Fortunately, in both these places we already have our fibre connectivity, so putting up some of the wireless network would not be … difficult.

Neotel has covered a large portion of Durban, as well as the north and south coasts. Although the company has about 1 000 customers in the Durban region, Pandey said, it has the capacity to sign up about 100 000 households.

kavith@witness.co.za

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