Tata group exits another JV, this time with Lucent
15 Jan 2000
India''s Tata group is disconnecting from Tata Lucent Technologies, its 50:50 joint venture with Lucent Technologies of the US. Tata Industries, which has invested in the joint venture''s equity on behalf of the Tata group, will divest 49 per cent of the equity in favour of Lucent, and retain a token one per cent. The decision is in line with the Tata group’s restructuring exercise to gain focus and concentrate on chosen areas of business.
Tata Lucent Technologies, with a paid-up equity capital of Rs 207 crore, came into being in April 1997 for making and marketing telecom equipment and network systems. Its facilities are located at Bangalore, where it has an employee strength of 300.
This parting, Tata Industries chairman Kishore Chaukar clarified, will not immediately affect Tata Telecom, the other Tata joint venture with Lucent. Tata Industries and Lucent own 26 per cent each of the equity of this telecom equipment manufacturing company The equipment supply contract given to Lucent by another Tata company, Tata Teleservices, which provides the basic and cellular telephone services in Andhra Pradesh, will also remain intact.
The Tata group does not want to be in the telecom equipment supply business. It wants to concentrate on being a service provider, explains Mr Chaukar. That''s where the real growth is, he believes.
This will be the third important joint venture that the Tatas are exiting in one year’s time. It had earlier exited Tata IBM and Tata Timken. There seems to be some hard rethinking in the house of Tatas about the usefulness of joint ventures.
