Tata's VSNL to Acquire Teleglobe for $239 Million

India's Videsh Sanchar Nigam Limited (VSNL) agreed to acquire Teleglobe International in a deal valued at $239 million. The acquisition would significantly expand VSNL's ownership interests in undersea cable networks and provide it with more than 200 direct and bilateral agreements with leading voice carriers, many of which are the incumbent carriers within their countries or large international wireless service providers.


Telegloge, which was once the international carrier for Bell Canada, currently has ownership in 100 worldwide cable and satellite networks. Following a split from Bell Canada Enterprises in 2002 and a subsequent bankruptcy, Teleglobe was relaunched in June 2003 as a provider of international voice, wireless roaming, data and Internet services. Teleglobe later acquired ITXC, one of the largest providers of international VoIP wholesale services with direct relationships with carriers in more than 175 countries. Teleglobe is currently headquartered in Hamilton, Bermuda with a large operating center in Montreal. The company claims more than 1,400 wholesale customers and expects to carry over 13 billion minutes of voice traffic globally this year.


VSNL, which is part of India's $17 billion Tata Group, has a strong pan-India domestic Long Distance network. It is also a leading player in the Corporate Data Market in India, offering Frame relay, ATM and MPLS based IP-VPN services. VSNL also has a rapidly growing retail presence under the Tata Indicom brand through its products like high speed broadband, dial-up Internet, net telephony and calling cards.


Earlier this month, VSNL completed its acquisition of the Tyco Global Network (TGN), a state-of-the-art undersea cable network that spans 60,000 km (37,280 miles) and the continents of North America, Europe and Asia. With the acquisition of TGN, VSNL is now one of the world's largest providers of submarine cable bandwidth. VSNL acquired the network for $130 million (not including the assumption of certain liabilities). In addition to the submarine cables, the Tyco acquisition gave VSNL 30 Points of Presence in 12 countries in North America, Europe and Asia. VSNL also has business operations in Sri Lanka and Nepal and is soon entering South Africa.


"VSNL's vision is to become a leading global player in wholesale voice and bandwidth and enterprise data services," said Mr. N Srinath, Director on the Board of VSNL. "This agreement, coupled with the TGN acquisition and recently announced plans to expand into new markets, will move us closer to the size and network breadth needed to achieve this goal."http://www.vsnl.inhttp://www.teleglobe.com