Tata Communications Invests $430 Million in Asia Pacific Region

Tata Communications, a world provider of communications, has announced today its $430 million strategic investment plan in the Asia Pacific (APAC) region including developing the Tata Communications Exchange, a new world-class Internet Data Center (IDC (News - Alert)), and the completion of the main segment of its TGN-Intra Asia Cable System.

 

“The Asian market continues to be promising, even in the current economic environment. Businesses need to capitalize on the opportunities this region provides, and investments in Asia are critical for the growth of global business,” said Vinod Kumar, President and Chief Operating Officer for Tata Communications (News - Alert).

 

Kumar continued by saying, “Our large-scale investment in the Tata Communications Exchange, coupled with our submarine cable build-out, ensures scalability and global reach while delivering our commitment to meet customer requirements. We will continue to be an active leader in offering superior services into emerging regions where we see high growth potential and opportunities for customers.”

 

Narasimhan Srinath, chief executive, said that while Tata Communications had become more conservative over its investment picks due to the credit crisis, the Indian company remained committed to its plan to invest a further $2 Billion over the next three years in emerging markets, including Africa.

 

 “The Asian market continues to be promising, even in the current economic conditions,” Srinath told the Financial Times (News - Alert). “We continue to see opportunities in this recession, especially in emerging markets.”

 

Company officials insist that these investments are a key part of the company’s commitment to enhance its robust global infrastructure.

 

The Tata Communications Exchange and the TGN-Intra Asia Cable System are integral parts of the Tata Global Network (TGN) that includes submarine cable networks, a Tier-1 IP platform and more than 1 million square feet of data center and collocation facilities worldwide.

 

The Tata Communications Exchange is being developed in partnership with Mapletree Industrial Fund (a pan- Asian industrial fund managed by Mapletree Industrial Fund Management Pte Ltd (MIFM) which is a wholly owned subsidiary of Mapletree Investments Pte Ltd, a leading Asian real estate and capital management company based in Singapore.

 

Although the global recession has made it harder for Tata Communications to raise funds, the telecoms group has strong financials, analysts said.

 

”As long as the company doesn’t overstretch its investment, it’s in a good position to expand operations…as it makes sense to move into fast-growing emerging economies,” said G.V. Giri, a telecoms analyst at India Infoline in Mumbai.

 

Srinath said that in the future, Tata Communications business model would shift more towards managing data centers for clients and integrating the company’s services with other Tata groups that operate in the IT and telecoms sectors.

 

Building on Tata Communications’ extensive global submarine cable and Tier-1 Internet Protocol (IP) network, the new data center will deliver colocation, managed hosting, managed storage and value-added services, company officials said in a statement released today.

 

Tata Communications also announced the completion of the main segment of its $250 million TGN-Intra Asia cable system. The multi-terabit system spans 6,700 km that connects Singapore, Hong Kong, Japan, Vietnam and the Philippines. It increases data and voice reliability by providing new route diversity for traffic generated throughout and into APAC.

 

As part of its focus on expanding communications services to and from emerging markets, Tata Communications is partnering with Globe Telecom (News - Alert) and EVN Telecom to expand the TGN-Intra Asia Cable System into the Philippines and Vietnam respectively.