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* Deal would boost Vodacom in fixed line, fibre optic
* Tata holds over two-thirds of Neotel
* Neotel has enviable spectrum licences
By Helen Nyambura-Mwaura
JOHANNESBURG, Sept 30 (Reuters) - South Africa's VodacomGroup said on Monday it was in exclusive talks to buythe unlisted local unit of India's Tata Communications in a potential $590 million deal that would give it a largefibre optic network for high-speed Internet.
Acquiring Neotel would be a major boost to Vodacom'sambitions to grow its data business in Africa's largest economy.
Vodacom, a unit of Britain's Vodafone Group Plc, isthe most popular mobile carrier in South Africa, but has littlepresence in fixed-line and fibre-optic services, both key towinning business clients.
"The benefit they would gain is an expanded client base inthe fixed-line market segment," said Dobek Pater, an analyst atconsultancy Africa Analysis. "They would gain access to fibrefootprint and spectrum, and probably some additional skills toaugment their current skills base."
Vodacom CEO Shameel Joosub said the company would aim todeliver more high-speed Internet to homes and businesses. Neotelhas access to more than 15,000 km (9,300 miles) of fibre-opticcable, with over half of that in major urban areas, he said.
Neotel, which has mainly small and medium-sized businessesas its clients, has invested some 7 billion rand ($695 million)in developing infrastructure, Pater said.
South Africa's fixed-line market is dominated by formerutility Telkom SA, which is still part-owned by thegovernment and has plans to roll out broadband Internet in ruralareas.
SEEKING 100 PCT
Vodacom said it was looking to acquire 100 percent of Neoteland any shareholder loan claims. It did not give a potentialvalue for the deal.
However, Tata Communications said in its latest annualreport it had paid 922.4 million rupees ($14.8 million) for anextra 2.5 percent stake in Neotel, which would value it at about$590 million and bring Tata's stake to 67.32 percent.
Neotel's other two shareholders are CommuniTel, apartnership that includes Telecom Namibia, and a blackempowerment shareholder, Nexus Connexion, according to Neotel'swebsite.
Neotel said CommuniTel holds 12.5 percent. That would putNexus' stake at 20.18 percent, according to Reuterscalculations.
Neotel posted a 17.7 percent annual rise in quarterlyrevenue to 812 million rand ($80.6 million) in the three monthsto June. Tata, in comparison, has posted losses in four straightyears to March 2013.
Africa's biggest telecoms operator MTN said lastmonth that talks to acquire a Neotel stake had fallen through.
Vodacom shares finished down 1.2 percent at 124.45 rand,compared with a 0.8 percent decline by Johannesburg's benchmarkTop-40 index.
