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Tag: Primus Telecommunications India Ltd

  • VSNL buys out 7 Star’s cable internet business

    VSNL buys out 7 Star’s cable internet business

    MUMBAI: Videsh Sanchar Nigam Ltd (VSNL) is on a shopping spree. The telecommunications giant has bought out the internet business of 7 Star, a major cable network in Mumbai.

    The deal gathers significance as it allows VSNL last mile access and offers an expansion route through cable operators. Telecom operators like Reliance Infocomm and Bharti have been eyeing the retail broadband market but been unable to see rapid growth.

    Though the acquisition price could not be confirmed, market speculation is that VSNL has paid around Rs 70-80 million. The cable TV operations are outside the deal. 7 Star runs cable TV operations in the western suburbs of Mumbai and offers cable internet through LAN (local area network) connections.

    “We have acquired the internet business of the 7 Star group—Sevenstar.com. We cannot disclose further details due to confidentiality reasons. We continuously evaluate options for growing our presence in the internet and broadband space,” confirms a VSNL spokesperson. 7 Star promoters were not willing to comment on the deal.

    The cable internet subscribers of 7 Star will be migrated to the Tata Indicom Broadband brand over a period of time. “7 Star will continue to assist us in managing the customers,” says the VSNL spokesperson.

    Analysts say VSNL was willing to pay a higher price because 7 Star was almost a monopoly internet player in the area where it was servicing cable TV operations. The stretch included the western belt of Andheri and Santa Cruz in Mumbai.

    VSNL has tied up with around 2000 cable operators across the country to overcome the problem of last mile connectivity. VSNL executive director N Srinath had earlier said allying with operators and sharing their network was one of the best options the company had.

    For strengthening its broadband presence in the Small and Medium Enterprises (SME) segment, VSNL on Monday announced it had entered into an agreement to buy out Direct Internet Ltd (DIL) and its wholly owned subsidiary Primus Telecommunications India Ltd (PTIL) for Rs 750 million. While DIL will focus entirely on the SME segment, the retail customers are likely to be rehomed in VSNL. The earlier acquisitions of VSNL included DishnetDSL for Rs 2.7 billion and Tata Power broadband for Rs 2.39 billion which gave it broadband subscribers in the retail as well as the SME segments.

    Is VSNL looking at tie ups with cable operators for IPTV service as well? “VSNL currently is providing broadband and content services, in conjunction with cable operators. The company will continue to look at offering various value added services that is of mutual benefit to VSNL and the cable operators,” says the spokesperson. Reliance Infocomm, Bharti and other telecom operators have plans to rollout IPTV but have been unable to resolve the last mile connectivity.

  • VSNL to buy Indian ISP for Rs 750 million

    VSNL to buy Indian ISP for Rs 750 million

    MUMBAI: Videsh Sanchar Nigam Ltd (VSNL) is strengthening its broadband presence in the Small and Medium Enterprises (SME) segment. The telecommunications giant has agreed to buy out Direct Internet Ltd (DIL) and its wholly owned subsidiary Primus Telecommunications India Ltd (PTIL) for Rs 750 million ($16.7 million).

    US-based Primus Telecommunications Group Inc will exit from India, selling its entire 85 per cent stake in DIL. VSNL is also buying out the remaining 15 per cent held by an Indian partner. The deal is expected to be completed in a few weeks, VSNL said in a statement.

    PTIL provides fixed broadband wireless internet services to SMEs in several Indian cities. The company has close to 1,000 SME and 10,000 retail customers. Out of a total revenue of around Rs 550 million in FY 2006, nearly 80 per cent came from the SME segment. Retail business accounted for 15 per cent while Voice-over-Internet Protocol (VoIP) contributed to around seven per cent of the company’s income.

    The retail customers are likely to be rehomed in VSNL while DIL will focus entirely on the SME segment. The company’s operations will continue to be run with the old management. “The huge infrastructre of VSNL will allow DIL an opportunity to expand in the SME segment. VSNL has massive bandwidth which will offer DIL’s operations greater efficiencies. In the past, we were buying bandwidth on a leased basis and this was consuming 60 per cent of our costs,” says DIL and PTIL founder-CEO Tilak Sarkar.

    This will be VSNL’s first SME-specific acquisition in the internet space. VSNL had earlier acquired DishnetDSL for Rs 2.7 billion and Tata Power broadband for Rs 2.39 billion which gave it broadband subscribers in the retail as well as the SME segments. DIL, on the other hand, has mostly SME subscribers.

    “The SME segment is a lowly penetrated but growing market. VSNL sees this as an opportunity to expand its presence in the broadband space,” says an analyst.

    VSNL has been aggressive in acquisitions over the last one year. While it bought Tyco International’s global under-sea fibre optic cable network unit in July 2005, recently it acquired telecoms network service firm Teleglobe International Holdings Ltd.

    Nasdaq-listed Primus Telecommunications, an integrated communications services provider offering international and domestic voice, VoIP, internet, wireless, data and hosting services to business and residential retail customers, had reported a net revenue of $1.19 billion in the 2005 fiscal.