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Tata Communications is looking to turn its South African arm Neotel into a US$1bn regional-African data services business by acquiring licences and investing in infrastructure in a number of countries near to its home base.
The telecom network operator is reported to be looking to either seek licences in Namibia, Botswana, Zimbabwe, Swaziland, Lesotho and Mozambique or extend its existing fibre optic network into these markets. "Africa is a huge emerging market and Neotel will leverage its presence in South Africa for growth across the continent," said Ajay Pandey, president (corporate affairs & business opportunities) at Tata Communications. "Decisions, like applying for licences to deliver enterprise connectivity in the B2B space in new African markets or extending Neotel's fibre network into neighbouring countries, will be taken in consultation with our partners."The Tatas own 69.5% in Neotel through Tata Communications and Tata Africa Holdings, while the remaining is held by local partners Nexus Communications and Communitel. Nexus, which represents South Africa's Black Economic Empowerment group, is the second largest stakeholder in Neotel with 19% ownership, while Communitel holds 12.5%. Neotelcurrently generates US$450m in annual revenues and has a compounded annual growth rate of 25-30%.