Etisalat, Tata ink network services deal

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NETWORK SERVICES: Etisalat and Tata has inked a deal to provide ethernet and other connectivity services to customers in the UAE. (Getty Images)

India's Tata Communications and Etisalat said they had signed a deal to provide network services in the UAE, a move that would boost Tata's expansion overseas.

The two companies said in a statement on Tuesday they would provide ethernet, a popular protocol used for controlling data transmission over a local area network, and other connectivity, but did not disclose financial details.

Earlier this year Tata Communications, formerly Videsh Sanchar Nigam, had formed a similar partnership in China and an official told newswire Reuters in February the company was looking for more such tie-ups in Asia and the Middle East to boost growth.

The company, which is building undersea cables between Asia and Europe, and across Asia, has said it will spend $2 billion in the next three years to expand its international presence.

Tata Communications is a former state-run overseas telecommunications monopoly that is now controlled by the Tata Group. The company has expanded its network services for companies after a sharp fall in call tariffs hit its revenue.

Shares in Tata Communications, which has a market value of about $3.4 billion, closed 0.2% higher at 501.30 rupees in a weak Mumbai market. The stock has fallen 34.4% this year, outpacing the main index that has lost a fifth.

UAE's state-owned Etisalat has also been looking to expand overseas and has said it is looking to invest as much as $4 billion in the Indian telecoms market.

A UAE newspaper reported two weeks ago that Etisalat was eyeing an investment of $1 billion in Tata Teleservices, an affiliate of Tata Communications and India's No. 5 mobile services operator.

Etisalat has held talks with mobile firm Spice Communications for possible investment, while diversified Videocon Industries said last week the UAE firm was keen to buy a stake in its mobile operation.

The chairman of Etisalat said earlier this month it was evaluating a possible bid for South Africa's MTN, which runs mobile services in more than 20 countries.

India's No. 2 mobile firm Reliance Communications began talks for a deal with the African firm after bigger rival Bharti Airtel pulled out of merger talks at the weekend. (Reuters)

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