Tata Communications eye British telecom giant CWW, to compete with Vodafone

By Telecom Lead Team: Tata Communications is considering an acquisition bid for teleco firm London-based Cable & Wireless Worldwide and it may be competing with Vodafone, which revealed its interest in potential acquisition.


For the possible acquisition, CWW could be valued at $1.2 billion for its voice, data and IP based services to large clients four across continents.


CWW has been floating on troubled waters, as its market value declined over 70 percent in the last two years. The present situation of the company shows the economic uncertainty and woes in the global telecom sector.


Tata Communication is getting ready to launch a bid for the asset in the next two weeks and taking advice of Standard Chartered Bank on its largest telecom acquisition move.


However, C&W Worldwide said that the company had not received an approach from Tata Communications.


CWW has fixed lines that are used by mobile operators to provide links to mobile transmitters and switching offices. It also provides voice, data and hosting services to major British companies such as Next, Tesco and United Utilities, and retains an international cable network connecting more than 150 countries.


Tata Communications owns undersea cable assets and provides telecoms and Internet services to companies across countries. The potential acquisition would help it expanding its larger footprint in voice and data carrier businesses as well as in the undersea cable network.


CWW owns 4, 25,000 km of cables connecting more than 150 countries, with strong presence in most of the former British colonies.

Tata Group has built its presence in the data carrier business through acquisitions — VSNL (now Tata Communications) in 2002, Tyco International (US) in 2004, Teleglobe ( Canada) in 2006 and Neotel (South Africa) in 2009.


Tata Communications has invested more than $3.6 billion since 2002 in acquiring and building network and data centre infrastructure, technology and service capabilities and entering new markets. Roughly 75 percent of the company’s $2.6 billion revenues come from the overseas market.


For the Q311-12, Tata Communications posted 19 percent increase in revenue at Rs 36,041 million, against Rs 30,180 million in the same quarter last year.

Tata Communications’ global voice services contributed 55 percent to core business revenues in the period as compared to 54 percent in Q2 FY2012. The total voice minutes registered on the network were at 13.4 billion minutes as against 13.1 billion minutes in Q2 FY2012.


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