The Tatas are believed to be exploring the possibility of merging Tata Internet Services Ltd with Videsh Sanchar Nigain Ltd, which it recently acquired. This development closely follows the recent controversy surrounding VSNL board's decision to invest Rs 1,200 crore in Tata Teleservices. "Tata Internet's ISP service is currently being managed by Tata Teleservices. However, the group is now thinking whether to continue two ISP services under two different companies or bring the services under VSNL.

Clearly there is little logic in continuing with the existing setup, " Mr N.S. Ramachandran, director, Tata Teleservices Ltd told The Asian Age from Bangalore. Earlier, the Tatas were contemplating bringing TISL under Tata Teleservices' fold. The group in a bid to merge its voice and data communication services under one umbrella thought of merging TISL with TTL in the current financial year. However, as things stands now, the idea has been given a burial and the group is contemplating bringing Tata Internet under Tata Teleservices.

VSNL is now supposedly the second biggest internet service provider in the country. This, and the fact that the size of the pie isn't big enough don't justify the existence of two separate ISPs," he added. The merger, if it happens, will strengthen VSNL. The recently privatised telecom behemoth has witnessed drop in its share of internet service customers. VSNL has been overtaken by Satyam Infoway, which is now the largest ISP in the country with a subscriber base of 6 lakh as against VSNL's 5.5 lakh customers.

However, Tata Internet remains a niche player with focus on the corporate sector with major expansion plans. TISL operates Tatanova brand ISP services in Mumbai, New Delhi, Bangalore, Chennai and Hyderabad. On the consumer front the company offers Internet connectivity, operates cyber cafes and owns and runs several portals. TISL plans to set up 2,000 cafes in the next two years. On the corporate front, it offers Internet connectivity, networking services and data centre based services. The company has nearly 30,000 square feet of dedicated Internet data centre space in Mumbai, New Delhi and Hyderabad.