Vodacom CEO’s strategy explains Neotel acquisition plans

Vodacom is rumoured to be in advanced discussions to acquire Neotel, and Vodacom CEO Shameel Joosub’s views on where the company’s future growth will come from clearly shows why he may be looking to buy Neotel.

Speaking on CNBC Africa, Joosub said that he sees enterprise services as one of the biggest growth opportunities in South Africa.

“There is a big opportunity [for Vodacom] to capture more of the fixed [telecoms] space,” said Joosub.

Although Vodacom, through Vodacom Business, has some fibre infrastructure, it is still lacking extensive national and metropolitan fibre networks.

Acquiring Neotel will provide Vodacom with an established fibre network, which is already geared towards serving enterprise clients.

By purchasing Neotel, Vodacom can also increase its enterprise client base extensively, which it can then upsell with additional mobile and converged solutions.

An added benefit for Vodacom with a Neotel deal is access to valuable 800Mhz spectrum, suitable for the rollout of LTE.

While Vodacom and Neotel would not confirm or deny the acquisition talks, well placed sources informed BusinessTech that Vodacom is currently performing due diligence on Neotel as part of its acquisition talks.

More on Vodacom and Neotel

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Vodacom closer to Neotel purchase: sources

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Vodacom CEO’s strategy explains Neotel acquisition plans