CenturyTel Takes $23 Million Stake in Dishnet
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Dishnet Ltd., the ISP arm of Sterling Group, has sold 6.67 percent of its stake to the US-based CenturyTel Inc. (CTL), for US$23 million.
As a result of the deal, CTL will have one representative on the Dishnet board.
Dishnet was green-lighted by the Indian government last month for induction of foreign equity and issuance of ADRs or GDRs.
Based on the size of the CTL deal, Dishnet's total value works out to about US$343.33 million. By comparison, the market capitalization of rival ISP, Satyam Infoway (SIFY) is US$7 billion.
Dishnet was launched in March 1998 under the brand name ETH. After getting an all-India ISP license in December 1998, Dishnet launched Internet services in 20 Indian cities. A few months ago, Dishnet introduced Digital Subscriber Line (DSL) Technology, India's first high-speed Net access.
It aims to expand its network to 54 cities within a year. The company, which now boasts Web sites in English and Tamil, recently unveiled a plan to boost content with a US$93 million injection.
DishnetDSL chairman Vijay Bhatkar said that Dishnet has initiated action for an international private leased circuit from VSNL in Pune and Mumbai, and was also investing in increasing shared bandwidth in Mumbai, Pune and New Delhi.
Vijay added that Dishnet was the first ISP to get a license for an international gateway, and the gateway in Chennai was scheduled to begin operations in April.
Dishnet proposed to offer shares representing 40.37 percent of the company's fully paid-up capital in its IPO. However, the government's approval is only for Internet services.
Dishnet has partnered with companies like Microsoft, Portal, Compaq, Dell, Cisco and Ericsson as well as launching a Web site which gives school-going children access to an online curriculum, model test papers for board exams and other general knowledge tests.
Dishnet plans to launch a maiden IPO to partly finance its expansion program.