Welcome Guest Login | Register | Site Map | | Make TelecomTiger my homepage     
Telecom News
Enterprise |  Policy & Regulation |  Mobiles & Tabs |  Corporate |  VAS |  People Movement  |  Technology  |  LTE
Corporate
Tata Communications to streamline broadband business
TT Correspondent |  |  10 May 2011

Tata Communications is realigning its broadband business. It is bringing its retail broadband unit under the ambit of small and medium businesses. The consolidation, it feels, will help to approach the market led by a portfolio of products.

In March 2007, it hived off its retail broadband business into a separate company, Tata Communications Internet Services. It had plans to bring in financial investors in the company and was in talks with Singapore government's investment arm Temasek Holdings . The share-sale was linked to Tata Communications Internet Services winning the broadband wireless access spectrum in the government auction held in May-June of last year. However, high auction prices prevented the company from bidding. As a result, the Vinod Kumar-led management now feels that it is better to merge the retail broadband unit back with the parent company.

The restructuring, say analysts, means that the NYSE-listed Tata Communications is de-focusing on the retail broadband business, while stepping up the focus on the small and medium businesses. The retail business unit contributes less than 6% to the company's Rs 11,026 crore revenues.

The company, part of the salt-to-software Tata Group , is at the centre of a controversy involving its 773 acres of land. The government wants the land to be separated from the company, formerly known as VSNL, with the centre holding 51.12% stake in the realty firm. The government privatized the international long distance call carrier in 2000 to the Tata Group. The Tatas own nearly 50% stake in Tata Communications, while the government owns 26%, as per the company's latest filings with the bourses. The land dispute and the government's unwillingness to infuse equity has been hurting the company's fund raising plans. As a result, it has been resorting to debt to fund its expansion and this has weighed down on the company. Its debt on books is $1.4 billion. The company is in the red for the last few years and the management has chalked out a multi-pronged turnaround strategy, betting on enterprise solutions including cloud computing.  

    
 mail this article    print this article    Show and Post comment
10 May 2011(IST)  
Whitepaper
Maintain Business Continuity with Cisco ASR 9000 nV Technology
It is a virtual chassis solution where a pair of ASR 9000 routers acts as a single device by maintaining a single contr...read more
Simplify Your Network with Cisco ASR 9000 nV Technology
With the new Cisco Network Virtualization (nV) technology in the Cisco ASR 9000 Series Aggregation Services Routers, se...read more
Cisco Small Cell Solution: Reduce Costs, Improve Coverage
It is designed to address the challenge of mobile service coverage and to expand network capacity...read more