The Telegraph
Since 1st March, 1999
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Tatas in fresh telecom funding flurry

Mumbai, May 4: The Tatas will plough in Rs 33,000 crore in telecom by the end of this year, their biggest slice of investment across an entire array of industries.

'The Tata group's commitment to telecom will be around Rs 33,000 crore,' said Sandeep Mathur, president of Tata Indicom's enterprise business unit. VSNL and Tata Teleservices, which offer international long distance telephony, fixed wireless, mobile telephony, data services and broadband, are the Tatas' telecom spearheads.

'We have already pumped in 55-60 per cent of the amount,' Mathur said. This means that the company's fresh infusion of funds into telecom in the coming months will be in the region of Rs 12,500 crore to Rs 13,500 crore.

Mathur was speaking to reporters at a function to announce a strategic tie-up that the Tatas forged with Cable & Wireless to offer global telecom services to Indian companies.

The Tatas have made it clear in the past that they aim to be leaders in all spheres of telecom. Chairman Ratan Tata will coordinate growth in the medley of telecom firms in his stable.

The Rs 65000-crore group, which had a slow start in telecom, is finally crystallising plans that have been boosted by a flurry of launches across the country. In the next phase, it will expand its national presence by setting up more base stations in scores of smaller towns.

Tata Teleservices' reach already extends to 85 per cent of the country, a figure it intends to take to 90-95 per cent in 18 to 24 months.

Last month, Ratan Tata stepped down as chairman of VSNL to give himself the time to steer the telecom juggernaut, which is rolling with so much of the group's cash. VSNL won the race for a basic telephony firm in South Africa and is eyeing a company in Pakistan.

Recently, Kishore Chaukar, managing director of Tata Industries, said the Tatas will invest Rs 8000 crore in the next two to three years to expand their telecom network.

The funds will be raised through a mix of equity and debt in the ratio of 1:1, Chaukar said.

There have also been reports in the past about a partnership with a foreign major for a fresh thrust into telecom. Korea Telecom was tipped as a possible alliance partner, given that its background in CDMA services and broadband matches that of the Tatas.

The Tatas are also familiar with South Korean business, having crafted the successful acquisition of Daewoo Commercial Vehicles.

Cable & Wireless

The tie-up with Cable & Wireless, forged through Videsh Sanchar Nigam, will give the Tatas the ability to offer a wide range of global connectivity services.

Companies can get seamless links to the UK major's global network through VSNL's domestic and international access systems. Meanwhile, VSNL also said it had all approvals required to formalise the takeover of Tyco Global in its bag.

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