Singapore: Tata Communications International Pte Ltd, a wholly owned subsidiary of Tata Communications Limited, has signed an equity joint venture agreement (EJV) with the shareholders of China Enterprise Communications Limited (CEC) for the acquisition of 50 per cent equity interest in CEC. This joint venture, which will become effective after the necessary approvals from the relevant government and regulatory bodies in China are obtained, will be the first-of-its-kind in the Chinese telecom sector post China’s entering the WTO.
“The strategic cooperation between China Enterprise Communications and Tata Communications was carried out under the background of economic globalisation, and the fact that China and India are driving the 21st century world economy. Through the cooperation with Tata Communications, we will focus on the development of the domestic market to provide high quality networking services to multinational enterprises in China as well as China’s domestic enterprises. We intend to grow the strength of the CEC brand,” said Zhu Jianhua, president and CEO of CEC.
CEC is a value-added telecommunications services and integrated IT solutions provider headquartered in Beijing, China. CEC was recently awarded a nationwide IP-VPN service licence by China’s Ministry of Information Industry (MII), the first telecom valued-added service licence granted to a non-facilities based service provider. CEC has network reach throughout China, with no regional restrictions on its service capabilities. CEC provides VPN connectivity reach into 347 cities in China, including a dual-pop presence in tier-one cities like Beijing, Shanghai, Guangzhou and Shenzhen. This reach complements Tata Communications’s VPN presence in 120 Indian cities and 19 other major business capitals in North America, Europe and Asia.
“Tata Communications is honoured to have this unique opportunity to establish an EJV with the shareholders of CEC and to become one of the first global telecom companies to attain this type of access to the Chinese market,” said Vinod Kumar, president, data and mobility services, Tata Communications. “Tata Communications understands and respects the complex, fast-changing and extremely competitive Chinese telecom environment and the needs of customers requiring seamless end-to-end connectivity. This is an innovative step in our ongoing effort to enable connectivity and managed services across strategic regions and emerging markets that are of high value to our global customers.”
"This is a historic investment,” said Camille Mendler, vice president of Yankee Group’s Enterprise Research Group. “Not only does it allow for the delivery of unprecedented reach into China and India for global enterprises, it also confirms Tata Communications's leading position in service delivery to emerging markets."
CEC is majority owned by China International Trust and Investment Corporation (CITIC); other investors of CEC include SASAC and CE-SCM. Tata Communications’s investment in CEC is subject to various closing conditions as well as approvals from and the relevant Chinese governmental and regulatory bodies, including but not limited to the MII and the Ministry of Commerce.