Communication
Vodafone Unit Buys Tata’s South African Telecom Stake
NEW DELHI — India’s Tata Communications Ltd. on Monday said it has sold its stake in South African telecommunications company Neotel to an arm of Vodafone Group PLC.
Tata Communications currently owns 67% of Neotel, which provides wholesale telecommunications and Internet services to companies in Africa. The company didn’t disclose the value of its stake. The deal values the company at seven billion rand ($677 million), according to a statement released by Tata.
Vodacom said it would fund the deal through cash and loans, though the structure of the deal and its terms still needs regulatory approval.
For Vodafone, the acquisition will strengthen its foothold in South Africa—a global hot spot for telecommunications growth—by adding high-paying, corporate customers to its existing cellular subscribers. Vodafone currently has about 50 million users on its network in South Africa, while Neotel has about 152,000 customers in South Africa, which includes corporations with multiple accounts and individuals.
The deal also gives Vodacom access to 15,000 kilometers, or about 9,320 miles, of fiber-optic cables, including 8,000 kilometers of cables in South Africa’s major cities including Johannesburg, Durban and Cape Town. It likewise will give Vodacom much-needed airwaves to roll out third-generation telecommunications services. Fiber-optic cables help a telecommunications operator transmit high-speed Internet services.
Vodacom expects the deal to cut its cost and capital expenses in South Africa, with annual savings of 300 million rand before integration costs, five years after the deal closes.
The deal will be “good for the consumer, good for business and good for the country,” said Vodacom Group Chief Executive Shameel Joosub.
Tata Communications and Vodacom began exclusive talks in September, when footing the bill for Neotel’s expansion into services such as high-speed Internet and cellular networks started getting expensive for Tata. These costs offset the 11% slice of revenue Neotel contributed to Tata Communications’ total.
Tata Communications will use deal proceeds to lower its debt load, as the company had about 16.83 billion rupees of long-term loans at the end of the last fiscal year.
Tata also needs cash to buy out the stake of NTT DoCoMo Inc. in its Indian telecom venture Tata Teleservices Ltd. NTT DoCoMo, Japan’s biggest carrier, said in late April that it plans to exit its entire 26.5% stake in the telecom venture by June, after five years of losses amid telecom-license cancellations from a corruption probe.
– WALLSTREET JOURNAL
In a significant market projection, Mordor Intelligence predicts that the Nigerian telecom sector is set to surge to a value of $11.43 billion by 2029.
The report anticipates a steady growth trajectory with a cumulative average growth rate (CAGR) of 4.70% between 2024 and 2029, based on the current market value of $9.09 billion.
The transformation of Nigeria’s telecom landscape, fueled by government initiatives to boost internet infrastructure and broadband connectivity, coupled with rising data consumption, 5G deployments, and innovative strategies from major telecom players, is expected to drive this substantial market expansion.
The report underscores additional factors propelling the growth of Nigeria’s telecom sector, emphasizing the surge in smartphone adoption.
the report said “Increased smartphone adoption in Nigeria has fueled the development of a dynamic digital services sector. Currently, millions of Nigerians use mobile apps, including social networking sites, e-commerce, and financial services.
“These apps could leverage smartphones’ capabilities to offer speed, convenience, and efficiency, encouraging more people to invest in smartphones.
“In addition to these expansions and collaborations, the growing adoption of digital technologies and government support in aiding the same alongside the 5G technology implementation across the country is analyzed to boost the demand for telecom towers significantly.”
“In addition to these expansions and collaborations, the growing adoption of digital technologies and government support in aiding the same alongside the 5G technology implementation across the country is analyzed to boost the demand for telecom towers significantly.”
Mordor Intelligence highlights that the flourishing e-commerce and digital service platforms in Nigeria are significant drivers behind the escalating demand for dependable telecom services in the country.
The Nigerian Communications Commission (NCC) has granted MTN’s request to partially disconnect Globacom (Glo) from its network owing to unsettled interconnect charges.
Reuben Muoka, the NCC’s Director of Public Affairs, disclosed this in a document named ‘Pre-Disconnection Notice’ on Monday.
The move follows Glo’s persistent failure to clear its outstanding debts despite multiple attempts to resolve the issue.
Under this partial disconnection, Globacom subscribers will solely receive calls from MTN users, while retaining access to other network services like outgoing calls to other networks and data services.
However, they won’t be able to initiate calls to MTN users during this period.
The statement read, “All subscribers are, therefore requested to take notice that the Commission has approved the Partial Disconnection of Globacom to MTN in accordance with Section 100 of the Nigerian Communications Act, 2003 and Paragraph 9 of the Guidelines on Procedure for Granting Approval to Disconnect Telecommunications Operators, 2012.
“At the expiration of 10 days from January 8, 2024, subscribers of Globacom will no longer be able to make calls to MTN but will be able to receive calls.
“The Partial Disconnection, however, will allow in-bound calls to the Globacom network,” it added
Nigerian telecommunication users, along with others within the country, expended a total of N3.33 trillion on various telecom services such as calls, data, SMS, and more throughout 2022, according to the Nigerian Communications Commission (NCC).
This information comes from the recently published ‘2022 Subscriber/Network Data Annual Report’ by the NCC, which also revealed that telecom companies generated N3.33 trillion in overall revenue for that year.
The report further highlights a noteworthy growth of active voice subscriptions, rising from 195,463,898 subscriptions in 2021 to 222,571,568 by December 2022, marking a 13.86% year-on-year increase.
Commenting on the increase, it said, “The increase in the Operators’ subscriber base was attributed to a number of reasons which includes subscriber loyalty, promos, seasonal effects, aggressive consumer acquisition drive, and competitive product offerings across all the networks.”
It noted that the growth in active subscriptions impacted positively on other derived telecom indicators such as teledensity, Internet penetration as well as broadband penetration.
Data usage also continued its surge in 2022. It increased by 46.77 per cent to 518,381.78TB as of the end of the year.
The NCC stated, “There was an increase in the volume of data consumed at the year-end December 2022 when compared with the year-end December 2021.
“The total volume of data consumed by subscribers increased to 518,381.78TB as of December 2022 from 353,118.89TB as of December 2021. This represents an increase of 46.77 per cent in data consumption within the period.”
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