Tata Comm sign pact with CEC

Mumbai: Tata Communications (formerly VSNL) has signed an equity joint venture agreement with the shareholders of China Enterprise Communications (CEC) Ltd for acquiring 50-per cent stake in the Beijing-based company.

This engagement will enable Tata Communications to leverage the fast growth seen in the Chinese market by providing high quality networking services to domestic and multinational enterprises there, said Mr Srinivasa Addepalli, Senior Vice-President (Corporate Strategy), Tata Communications.

However, Tata Communications did not divulge financial details of the stake purchase.

CEC is a value-added telecommunications services and integrated IT solutions provider.

The company recently became the first non-facilities based service provider to be awarded a nationwide IP-VPN service licence by China’s Ministry of Information Industry. In February this year, Tata Communications has forged a network-to-network interface agreement with CEC for expanding its global VPN service to China.

Tata Communications signed the pact through its wholly owned unit, Tata Communications International Pte Ltd.

The city-based provider of voice and data services is open to acquisitions that will bridge gaps in its service offerings and also help in its pursuit of enhancing geographical reach. “We want to expand our footprint in Asian markets as they are very lucrative. We are open to acquisitions that would enable us strengthen foothold in geographies such as Indonesia, Thailand, Vietnam and the Philippines where we already have entry-level presence,” said Mr Addepalli.

The company is also keen to acquire niche products in the managed services area, said Mr Addepalli.

Separately, Tata Communications has earmarked $500-$600 million in capital expenditure for the fiscal 2008-09, Mr Rajiv Dhar, Chief Financial Officer, said in a conference call with analysts on Wednesday.

The company will spend around $250 million on expanding its cable network.