Liquid Telecom-Neotel Deal Gets SA Regulatory Nod

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South African telecom regulator, the Independent Communications Authority of South Africa (ICASA), has approved privately owned telecoms group Liquid Telecoms proposed acquisition of Neotel, removing a key regulatory hurdle to create the largest pan-African broadband network. By Staff Writer

This approval of the R6.55 billion deal follows approval from South Africa’s Competition Commission during October 2016.

Liquid Telecoms in collaboration with investment firm Royal Bafokeng Holdings agreed to buy the business in June 2016, a move that would enable it to compete better in a sector where competition is gaining steam every day. The proposed deal, however, will enable Liquid Telecoms to be competitive in the South African market as Neotel owns a much-needed spectrum to rollout broadband.

The combined network assets and service platforms will give Liquid Telecom unrivalled reach across Eastern, Central and Southern Africa, enabling it to offer access via a single connection to over 40,000km of cross border, national and metro fibre networks across 12 countries.

Liquid Telecom’s partner, South African investment group Royal Bafokeng Holdings (RBH), will own a 30% stake in Neotel.  Liquid Telecom is owned by Econet Group, which was founded by industry stalwart Strive Masiyiwa.

“The combined companies will create an unparalleled footprint covering key markets across the continent, giving Liquid Telecom a significant competitive advantage through the breadth, depth and flexibility of our consolidated networks,” Nic Rudnick, CEO of Liquid Telecom, said.

“We will be able to offer African companies the highest quality and most extensive connectivity on the continent. We appreciate the efficiency with which this transaction was dealt with by both ICASA and the Competition Commission.”

Liquid Telecom will invest in Neotel’s products and services in order to support the rising demand for network services in South Africa and other African countries. Neotel will also benefit from Liquid Telecom’s pan-African experience and technology leadership, helping to enhance systems and processes across its operations as well as drive profitability.

“Our decision to partner with Liquid Telecom and Neotel is in line with our diversification strategy which seeks to invest in high growth sectors. Together, we are well positioned to expand through telecommunications infrastructure and services sector in other key markets beyond South Africa,”Albertinah Kekana, CEO of RBH, said.

Royal Bafokeng Holdings is a community based investment company and is the primary investment vehicle of the Royal Bafokeng Nation (RBN), a community of approximately 150,000 Setswana-speaking people with substantial minerals-rich land holdings in South Africa’s North West Province. It has assets spread across the mining, financial services, infrastructure, oil and gas services, and industrial sectors. As at 31 December 2015, Royal Bafokeng Holdings net asset value was R25 billion.

“Leveraging the strengths of Liquid Telecom, Neotel’s staff and customers will benefit from the stability, planned expansion and increased investments into the business. This will enable Neotel to reach its full potential in South Africa and across the African continent,” said Neotel’s non-executive director in Charge, Kennedy Memani.

Since its launch in 2006, Neotel has invested over R7 billion in infrastructure, deploying a nation-wide backbone fibre connecting the top 40 cities and towns in South Africa. Neotel connects over 5,000 businesses and passes close to another 100,000 addresses.

The transaction will transform Liquid Telecom’s presence in South Africa, where Liquid Telecom’s growing base of corporate and enterprise customers will benefit from Neotel’s extended services portfolio and advanced network reach.

The deal for Neotel continues a period of accelerated growth for Liquid Telecom, which has combined strategic acquisitions, such as the recent joint venture in Botswana and the acquisition of Tanzania’s leading ISP Raha, with ongoing investment in the rollout of fibre.

The transaction provides a scalable platform for further long-term growth, enabling Liquid Telecom to deliver on its vision of a more connected Africa.

  • Photo Credit: Tata Africa

 

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