Mumbai – June 10, 2010 – Tata Communications (Hong Kong) Ltd, a wholly-owned indirect subsidiary of Tata Communications Ltd and the shareholders of China Entercom Communications Ltd (CEC) have jointly withdrawn their Equity Joint Venture application with the Chinese Government. Both organizations have mutually agreed to terminate the various agreements memorializing Tata Communications’ equity investment in CEC.
CEC and Tata Communications will continue with their existing network services co-operation relationship and have also entered into a new co-operation agreement whereby Tata Communications and CEC will work together on a commercial basis to allow Tata Communications to benefit from access to CEC’s network and assets in China, as Tata Communications continues to focus on this key market.
Speaking on the development, Srinivasa Addepalli, Senior VP, Corporate Strategy, Tata Communications, said, “The parties mutually agreed to withdraw the EJV application due to the uncertainty of whether any regulatory approvals from the Chinese Authorities were forthcoming. While the EJV has been called off, we will continue to work with CEC to further our plans in China. Our commercial relationship with CEC continues to give us network access in China, which serves our customers seeking connectivity into this geography.”
"China is a priority market for Tata Communications and we will continue to actively evaluate long-term investment opportunities in this region," concluded Mr. Addepalli.
Commenting on the termination of the agreement, Ms Sun Yinghong, COO, CEC, said, “This mutual withdrawal of the EJV application will not deter us from working closely with Tata Communications to provide a superior class of network services to our customers in China as well as to those businesses seeking to expand into the country.”
Through the co-operation with CEC, Tata Communications will provide VPN services to the main cities of China. This reach complements Tata Communications' global VPN presence. The organization has also recently introduced Ethernet services to global enterprises and carriers wanting to connect to China and has existing MPLS and International private leased circuit capabilities into the country through local partners.
About Tata Communications
Tata Communications is a leading global provider of a new world of communications. With a leadership position in emerging markets, Tata Communications leverages its advanced solutions capabilities and domain expertise across its global and pan-India network to deliver managed solutions to multi-national enterprises, service providers and Indian consumers.
The Tata Global Network includes one of the most advanced and largest submarine cable networks, a Tier-1 IP network, with connectivity to more than 200 countries across 400 PoPs, and nearly 1 million square feet of data center and collocation space worldwide.
Tata Communications' depth and breadth of reach in emerging markets includes leadership in Indian enterprise data services, leadership in global international voice, and strategic investments in operators in South Africa (Neotel), Sri Lanka (Tata Communications Lanka Limited), Nepal (United Telecom Limited).
Tata Communications Limited is listed on the Bombay Stock Exchange and the National Stock Exchange of India and its ADRs are listed on the
New York Stock Exchange. (NYSE: TCL)
Forward-looking and cautionary statements
Certain words and statements in this release concerning Tata Communications and its prospects, and other statements, including those relating to Tata Communications’ expected financial position, business strategy, the future development of Tata Communications’ operations, and the general economy in India, are forward-looking statements. Such statements involve known and unknown risks, uncertainties and other factors, including financial, regulatory and environmental, as well as those relating to industry growth and trend projections, which may cause actual results, performance or achievements of Tata Communications, or industry results, to differ materially from those expressed or implied by such forward-looking statements. The important factors that could cause actual results, performance or achievements to differ materially from such forward-looking statements include, among others, failure to increase the volume of traffic on Tata Communications’ network; failure to develop new products and services that meet customer demands and generate acceptable margins; failure to successfully complete commercial testing of new technology and information systems to support new products and services, including voice transmission services; failure to stabilize or reduce the rate of price compression on certain of the company’s communications services; failure to integrate strategic acquisitions and changes in government policies or regulations of India and, in particular, changes relating to the administration of Tata Communications’ industry; and, in general, the economic, business and credit conditions in India. Additional factors that could cause actual results, performance or achievements to differ materially from such forward-looking statements, many of which are not in Tata Communications’ control, include, but are not limited to, those risk factors discussed in Tata Communications’ various filings with the United States Securities and Exchange Commission. These filings are available at www.sec.gov. Tata Communications is under no obligation to, and expressly disclaims any obligation to, updates or alters its forward-looking statements.