VSNL has been given a 26 per cent share in the new company that will compete alongside the former state company Telkom, South Africa's Telecommunications Minister Ivy Matsepe-Casaburi announced in Durban.
Tatas will control SNO with black empowerment companies including Nexus which has a 19 per cent share and state companies of Eskom and Transnet which have 15 per cent stake each, she said.
She said the Tata Group, which already has motor vehicle and other business interests in South Africa, was granted the share after a "long drawn-out bidding process".
Matsepe-Casaburi said, "Tata had a great deal of experience in the telecom industry in India and this would be of tremendous benefit in South Africa".
"The new initiative is an extremely important venture in the managed liberalisation process of the telecommunication sector and I want to wish VSNL well", she said.
Tata Group chairman Ratan Tata is a member of South African President Thabo Mbeki's International Economic Advisory Council.
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