Orange Business Services, the business communications arm of France Telecom, has bought the enterprise network services and managed services business of GTL in an all-cash deal. GTL is among the top companies in the country providing managed services to call centres and BPO firms. The two companies have not, however, disclosed the size of the deal.
This is the second acquisition in this space in recent months. Earlier, BT bought i2i, another Mumbai-based company in managed services, for about $100 million. Standard Chartered was the lead advisor for GTL, while BMR Advisors was the advisor and due diligence partner for France Telecom.
The acquisition of GTL’s managed service division will help Orange establish itself as a major player in this segment. It will get the benefits of a significant customer base, dedicated sales force, skilled professionals and relationships with leading technology providers in the enterprise networks space.
GTL has over 450 customers and a major presence in the BFSI and ITeS segments. Some of its clients include Citibank, Standard Chartered, Deloitte, WNS and First Source. The company also has relationships with leading technology providers such as Alcatel-Lucent, Nortel, Juniper, Patchlink, Arc Sight and Verint in the enterprise space. GTL is one of the oldest partners of Nortel and has a leadership position in the Contact Center space. The business serves customers from 13 locations in India and internationally in countries like the US, the UK, Singapore and Sri Lanka.
The enterprise and managed services business of GTL recorded revenues of over Rs 140 crore in fiscal 2006-07 and has over 590 employees. They include more than 200 engineers, trained in various skill sets in converged solutions, data technologies and infrastructure management.
The proposed divestment is not likely to impact the revenue growth of GTL. GTL chief operating officer (COO) Charudatta Naik, “The growth guidance given to 30 per cent is based on the Network services in the telecom domain and does take into account the hive-off of the enterprise segment. We have already shared our order visibility of Rs 1,600 crore, which is purely based on telecom services.”
The hiving off of the IT Services business is part of the ongoing restructuring programme through which the company wants to focus solely on network services. It intends to add capabilities across the entire spectrum of the Network Life Cycle of Telecom Operators and Technology Providers.
Orange Business Services CEO Barbara Dalibard said, “India is a key growth market for our customers. The acquisition of GTL’s enterprise and managed services divisions broadens our ability to deliver best-in-class enterprise services and solutions for our customers throughout the region, including customers in India.”
Wireless Mobile Telecom Wireless News
In a major expansion drive aimed at consolidating its business of providing cellular operators shared infrastructure, shared telecom infrastructure services provider GTL Infrastructure Limited (GIL) proposes to build, own, and operate shared passive telecom infrastructure for approx cell sites at an investment of over Rs2,030 crore.
GTL Infrastructure Limited (GIL) established by GTL Limited as an infrastructure company to provide shared infrastructure assets and services in the telecom sector, passive telecom infrastructure includes the tower, shelter, air-conditioning equipment, diesel generator, battery, etc. for cellular operators.
The fresh roll out in passive telecom infrastructure includes setting up of new greenfield sites will be based on cellular operator requirements who will be its anchor user. These sites will, however be capable of accommodating other operators for co-location and will be marketed by GIL to prospective telecom operators on a sharing basis. The sites would either be ground-based sites (GBS) or rooftop sites (RTS).
As part of its acquisition plans, GIL would acquire existing sites from various operators and refurbish them to suit sharing and co-location requirements.
Passive telecommunication infrastructure constitutes around 65 per cent of the total capital cost with active component making up the remaining 35 per cent. However, given the recent rise in property, steel and cement prices, the capital cost of passive infrastructure is going up while that of the active infrastructure is coming down with declining prices of electronic components.
While overall telecom infrastructure requires huge investment outlays, such investments often turn out to be risky propositions given the rapid introduction of successive generations of new technology. Operators are occasionally faced with a situation where even before recovering their investments in existing infrastructure they have to embark on further investments in new generation networks.
Shared Infrastructure will bring down the passive infrastructure cost of telecom operators by at least 35 per cent to 40 per cent, the company feels.
According to Prakash Ranjalkar, chief operating officer, GIL, “The objectives of infrastructure sharing is to maximise the use of existing infrastructure and provide cost effective infrastructure for coverage requirements and in low ARPU areas. GIL’s business model focuses on creating value through shared infrastructure for both the operators and the company. Indian telecom sector is witnessing a huge growth and GIL would like to act as catalyst to fuel this growth by bringing down the capital expenditure and operational costs for telecom companies and fuel growth”
India has the eighth largest telecom network in the world, growing at a rate of over 20 per cent per annum. The New Telecom Policy of 1999 facilitated major transformation in the telecommunication sector. The Indian mobile market is now one of the fastest growing markets in the world, adding around four million new subscribers every month.
The market has grown from less than 10 million in 2002 to 92 million subscribers in 2006 and is expected to reach 205 million by the end of FY08. The wireless operators are planning to spend $20 billion over a period of next three years expanding their networks. It is estimated that the number of towers would grow to 180,000 in FY08 from the 82,000 at present
Source- http://www.domain-b.com
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France Telecom arm Orange buys GTL unit
