India's largest private telecom company is steadily spreading its net to other parts of the globe. With three acquisitions in the US and two in India, Videsh Sanchar Nigam Ltd (VSNL) is poised to realise its aim of becoming an end-to-end global telecom services provider.

Within a span of three years, VSNL has acquired Gemplex, US; Tyco Global Network, US; Tata Power Broadband and Dishnet DSL's ISP division in India, and Teleglobe, US, thus dramatically expanding its reach and spread of services.

Networking the world
The Gemplex deal, which began as a strategic tie-up, enabled VSNL to offer enterprise customers IP-based international virtual private network (VPN) services to over 37 countries and 530 cities around the world. It also gave the company a ready customer base in the high traffic regions of the US, Europe and the Far East.

The takeover in 2004 of Tyco, a state-of-the-art undersea cable network that spans 60,000 kilometres and the continents of North America, Europe and Asia, catapulted VSNL into the big league of international telecom providers. "This acquisition was another positive step in our ongoing drive to offer global connectivity and efficient communications solutions for our customers," affirms N. Srinath, director of operations, VSNL.

VSNL also bolstered its internet business in 2004, by acquiring Dishnet DSL's internet service provider (ISP) division. This brought in over 600 owned and franchised cybercafes and a broadband ISP service, apart from consolidating VSNL's position in the dial-up ISP space, adding 20 operating locations to its existing 30.

In the October of 2005, VSNL bought out the entire stake of Tata Power in Tata Power Broadband, bringing its fibre optic network in Mumbai and Pune under its fold. The acquisition boosts VSNL's retail broadband services, and along with the Dishnet acquisition, strengthens its internet and broadband business.

Teleglobe International Holdings, acquired in February 2006, is the latest jewel in the crown. A leading provider of international telecommunications services to ISPs, fixed and mobile network operators, Teleglobe will make VSNL the fifth-largest global carrier of voice minutes. "The Teleglobe acquisition was based on key synergy areas, including complementary global infrastructure and product offerings, as well as a shared culture," says Mr Srinath about the $239-million deal.

Tele convergence
With these acquisitions, VSNL now owns and operates one of the world's largest international mobile, data and voice networks, providing 1,400 wholesale customers and 650 enterprise customers with coverage to more than 240 countries and territories.

Each new acquisition brings VSNL closer to its dream, of becoming one of the world's largest providers of voice, internet, and bandwidth services. But there's some distance to go, and other acquisitions may be on the cards. As Mr Srinath says, "We have not closed our eyes to any opportunities overseas."

Uploaded on May 17, 2006