South African cellular operator Vodacom has moved one step closer to a possible takeover of fixed line and internet provider Neotel with the news that it has entered exclusive talks with India-based firm Tata Communications, which has a 67.3% stake in Neotel. Tata’s shares have been valued at more than ZAR5 billion (USD502 million), Bloomberg reports, putting the total value of the company at USD596 million. The other key shareholder in Neotel is black empowerment group Nexus Connexion, which itself consists of 134 different investors. As reported by CommsUpdate at the start of August this year, Vodacom had begun carrying out due diligence on second national operator (SNO) Neotel, while rival South African cellco MTN was also reported to be interested. Neotel would allow Vodacom to expand its presence in the country’s corporate market and also holds valuable wireless spectrum assets.
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