The Telegraph
Since 1st March, 1999
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Dishnet works on Tata link-up

Calcutta, Nov. 19: The promoters of Dishnet DSL — the Sterling Infotech group of Chennai — are planning to divest a substantial holding in the company to the Tatas, says Dishnet DSL’s chairman Vijay P. Bhatkar.

“We have started negotiations with the Tatas to divest a substantial holding in Dishnet DSL,” said Bhatkar, who was in the city to address Infocom 2003 — the IT seminar co-sponsored by Businessworld.

Asked whether Sterling Infotech was looking to divest majority stake and management control in Dishnet DSL, Bhatkar said: “We can’t say yet whether the Tatas are going to acquire majority control of the company. We have just started talking to the group.”

Dishnet DSL intends to set up an undersea cable link between Chennai and Singapore. This could cost Rs 1,500 crore.

The project was conceived two years ago in partnership with TyCom — a leading provider of submarine fibre-optic cable networks — but could not be executed as the industry went into a recession.

“The telecom industry has turned around, and we are trying to revive the project. We intend to spin it off into a separate company and have approached the Tatas to acquire an equity stake in it as well,” Bhatkar said.

When contacted, a spokesperson for the Tata group refused to comment on the ongoing negotiations.

Besides the Tatas, Dishnet DSL is talking to a number of overseas companies for investment and also considering a public offering of shares.

“We had considered an IPO earlier, but could not go ahead with it as the market went into a tailspin,” Bhatkar added.

Dishnet DSL has so far invested Rs 400 crore in its operations in India. It has 622 MBps of bandwidth that it bought from Bharti-SingTel. The proposed submarine cable link will give it 7 terabits of additional bandwidth.

Videsh Sanchar Nigam Ltd (VSNL) — a company belonging to the Tata group — recently announced that it was setting up a similar 3,100-km submarine cable link between Chennai and Singapore that will give it 5.2 terabits of additional bandwidth.

Dishnet DSL and Tata Teleservices joined forces in May this year to provide broadband services through fixed-line telephones.

The relationship has recently been extended to cover the latter’s CDMA operation as well. The revenues from the service are shared between the two companies.

“Recently a team combining officials of Dishnet DSL and Tata Teleservices has been formed to draw up the broadband strategy for the telecom operations of the Tata group,” Bhatkar added.

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