(Telecompaper) India-based Tata Communications confirmed it's in exclusive talks to sell South Africa fixed operator Neotel to Vodacom, the African subsidiary of Vodafone. A final deal will depend on further negotiations, as well as regulatory and corporate approvals. The operators said the takeover would stimulate greater competition in the South African fixed telecommunications market, where Neotel has struggled to gain ground against incumbent Telkom. Vodacom will be able to expand into the growing fixed internet market, bundling offers with its mobile services for consumers and businesses, as well as profit from Neotel's spectrum holdings and backbone network. If the deal is implemented, Vodacom said it intends to invest significantly in the combined entity to provide high-speed fixed connectivity to many more businesses and consumers. No financial details of the proposed merger were announced. Earlier reports suggested that Tata's stake in Neotel could be worth around USD 500 million.