Tata Communications to invest $2 bn for global expansion
India’s private telecom operator Tata Communications Ltd on 13th Feb,2008 announced an investment proposal of over two billion dollars in the next three years to fund its global expansion plans. The Tata group owned telecom company, which launched a new brand integrating the former VSNL and Teleglobe brands, would leverage its Tata Global Network (TGN) in emerging markets in Asia and Africa to deliver a globally managed communications solutions.
The company said that Tata Communications is in the process of completing additional submarine cables systems connecting emerging markets in Asia, Middle East and Africa to Europe to meet the demands of consumer broadband and enterprise customers over the next five to eight years.
The company said it plans to increase its broadband penetration, and expansion into emerging markets, with a specific focus on the Internet Protocal (IP) network, MPLS, ethernet and value added managed services. The Tata Communications brand integrated the former VSNL, VSNL international, Teleglobe, Tata Indicom Enterprise Business Unit (TIEBU) and Cipris brands worldwide.
Tata Communications will invest around $1 billion in the submarine cable and WiMax businesses and another $1 billion for network expansion. The company is a part of a consortium that is laying a submarine cable system between India and France - India-Western Europe-Middle East (I-ME-WE) - and would invest around $45 million in the project. The consortium comprises 10 companies, of which the Indian partner is Bharti Airtel
Tata Communications had earlier announced a $250 million investment in TGN-Eurasia, another $200 million in TGN-Intra Asia and over $50 million in Seacom undersea cables. The remaining $500 million would be invested for WiMax operations, which were launched in Bangalore. The company is planning to launch the services in other cities, starting with Chennai, Delhi and Hyderabad. Another $1 billion would be invested in multi-protocol label switching (MPLS) and ethernet network rollouts across the world. This will ensure a scalable and secure network, through which the company will provide advanced services.
Tata Communications expects to post compounded annual organic sales growth of 15 per cent for the next four years. The company was also targeting a margin of at least 20 per cent on earnings before interest, tax, depreciation and amortisation on a consolidated basis for the next four years. Tata Communications shares gained 4.64 per cent to close at Rs 468.70 on the Bombay Stock Exchange.
Tags: Airtel, broadband, global expansion, tata communications, vsnl, wimax service