VSNL to acquire Teleglobe for $239 million
July 25, 2005

Videsh Sanchar Nigam Limited (VSNL) (NYSE: VSL), India's leading provider of international telecommunications and Internet services, today announced that the company has agreed to acquire Teleglobe International Holdings Ltd. (NASDAQ: TLGB), a leading provider of wholesale voice, data, IP and mobile signaling services. The acquisition would be carried out through the amalgamation of Teleglobe with a VSNL subsidiary in Bermuda. The acquisition value would be $239 million, comprising assumption of debt and payment of $ 4.50 per share to Teleglobe shareholders.

The acquisition, which remains subject to Teleglobe shareholder approval and government consents in various countries, would give VSNL access to an extensive global network that reaches more than 240 countries and territories with advanced voice, data and signaling capabilities and ownership interests or capacity in more than 80 subsea and terrestrial cables. VSNL would also access more than 200 direct and bilateral agreements with leading voice carriers, many of which are the incumbent carriers within their countries or large international wireless service providers. Headquartered in Hamilton, Bermuda with a large operating center in Montreal, Canada, Teleglobe also has more than 1,400 wholesale customers and carries over 13 billion minutes of voice traffic globally.

“VSNL’s vision is to become a leading global player in wholesale voice and bandwidth and enterprise data services,” said N Srinath, director on the Board of VSNL. “This agreement, coupled with the TGN acquisition and recently announced plans to expand into new markets, will move us closer to the size and network breadth needed to achieve this goal.”

VSNL is part of the $17 billion Tata Group, India’s largest industrial conglomerate. Earlier this month, VSNL announced the completion of the TGN acquisition, a state-of-the-art undersea cable network that spans 60,000 kms (37,280 miles) and the continents of North America, Europe and Asia. TGN was previously owned and operated by Tyco.

Srinath said, “Teleglobe’s high quality assets and established international expertise offered an ideal opportunity to enhance our telecommunications customer solutions over the long term. This strategic transaction creates a highly complementary combination of Teleglobe’s extensive wholesale Voice VoIP/TDM network, Global Tier 1 IP Network, and deep customer base with VSNL’s integrated telecom services to strengthen our position as a leading international telecoms provider.”

“By integrating Teleglobe into VSNL’s operations, we would be in a position to provide carrier and enterprise customers with services that would complement our recent TGN acquisition and other growth initiatives in India and elsewhere, perfectly,” said Mr. Vinod Kumar, President, VSNL International.

Teleglobe acquired Voice over Internet Protocol (VoIP) leader ITXC Corp. in May 2004.

Standard Chartered Bank acted as exclusive financial advisor to VSNL, in connection with the transaction. Kelley Drye and Warren served as counsel to VSNL.