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.

Forward-looking and cautionary statements
Certain words and statements in this release concerning Tata Communications and its prospects, and other statements, including those relating to Tata Communications’ expected financial position, business strategy, the future development of Tata Communications’ operations, and the general economy in India, are forward-looking statements. Such statements involve known and unknown risks, uncertainties and other factors, including financial, regulatory and environmental, as well as those relating to industry growth and trend projections, which may cause actual results, performance or achievements of Tata Communications, or industry results, to differ materially from those expressed or implied by such forward-looking statements. The important factors that could cause actual results, performance or achievements to differ materially from such forward-looking statements include, among others, failure to increase the volume of traffic on Tata Communications’ network; failure to develop new products and services that meet customer demands and generate acceptable margins; failure to successfully complete commercial testing of new technology and information systems to support new products and services, including voice transmission services; failure to stabilize or reduce the rate of price compression on certain of the company’s communications services; failure to integrate strategic acquisitions and changes in government policies or regulations of India and, in particular, changes relating to the administration of Tata Communications’ industry; and, in general, the economic, business and credit conditions in India. Additional factors that could cause actual results, performance or achievements to differ materially from such forward-looking statements, many of which are not in Tata Communications’ control, include, but are not limited to, those risk factors discussed in Tata Communications’ various filings with the United States Securities and Exchange Commission. These filings are available at www.sec.gov. Tata Communications is under no obligation to, and expressly disclaims any obligation to, update or alter its forward-looking statements.