Tata Communications to acquire 50-per cent stake in China Enterprise Communications
18 June 2008
Tata Communications' Singapore-based wholly owned subsidiary Tata Communications International Pte Ltd has signed an agreement with the shareholders of China Enterprise Communications Limited (China Entercom / CEC) to acquire a 50-per cent equity stake in the Chinese firm.
This is a first-of-its-kind agreement in the Chinese telecom sector after China joined the WTO. The joint venture requires approvals from the Chinese government and regulators.
"The strategic cooperation between China Enterprise Communications Ltd. and Tata Communications was carried out under the background of economic globalisation, and the fact that China and India are driving the 21st century world economy," said Zhu Jianhua, president and CEO of China Enterprise Communications Limited.
"Through the cooperation with Tata Communications, we will focus on the development of the domestic market to provide high quality networking service to multinational enterprises in China as well as China's domestic enterprises. We intend to grow the strength of the China Enterprise Communications brand," Jianhua added.
As one of the value-added communication solution providers, China Entercom has a strong financial and regulatory background due to its major shareholders being China International Trust and Investment Corporation Group (CITIC) and State-owned Assets Supervision and Administration Commission (SASAC).
CEC was recently awarded a nationwide IP-VPN service license by China's ministry of information industry (MII), the first telecom valued-added service license granted to a non-facilities based service provider. It has network reach throughout China, with no regional restrictions on its service capabilities. CEC provides VPN connectivity reach into 347 cities in China, including a dual-pop presence in tier-one cities like Beijing, Shanghai, Guangzhou and Shenzhen. This reach complements Tata Communications' VPN presence in 120 Indian cities and 19 other major business capitals in North America, Europe and Asia.
