Indian Telecom Adds Tyco Network

Further strengthening India’s position in the global communications arena,
Videsh Sanchar Nigam Limited will pay $130 million for
Tyco’s undersea fiber-optic network, the companies
announced today.

If approved by regulators in the United States, India and other countries,
the move would give VSNL, a telecom and Internet services provider, a
network spanning 37,000 miles and three continents.

“The agreement is a major step forward in our ongoing drive to offer our
enterprise and carrier customers seamless, end-to-end telecommunications
solutions that circle the globe,” N. Srinath, VSNL’s director of operations,
said in a statement.

VSNL is part of the Tata Group, an Indian IT and outsourcing giant. In
addition to Tyco’s network assets, VSNL is also planning to deploy its own
network between India and Singapore.

Signs of India’s telecom growth can be seen in recent industry statistics.
The Indian market for equipment and services is expected to jump to $24.3
billion by 2006, up from $13.7 billion in 2001, according to telecom
research firm Frost & Sullivan.

Part of the reason is that the offshoring movement has created demand for
networking equipment. Those facilities need the fast and secure phone and
Internet connections.

But VSNL isn’t content operating in India. The U.S. Federal Communications
Commission recently gave it permission to provide international
telecom service from the United States, and it already has operations in
Europe and Sri Lanka.

For its part, Tyco’s divestiture is aimed at paring down its business focus
and saving money. Tyco, which was hobbled by an accounting scandal, will
keep its telecom systems and supply business, which provides maintenance and
undersea cable construction.

A spokesperson for VSNL was not immediately available for comment and a Tyco
spokesman declined to answer questions about the timing of the closing,
its impact on employees and whether Tyco would provide any network maintenance
or supply services to VSNL going forward.