Tata Comm gets 50% stake in China's CEC

Tata Communications Ltd (formerly VSNL) has acquired 50 per cent stake in Chinese value added telecom service provider China Enterprise Communications (CEC).

CEC is headquartered in Beijing and majority shares of CEC was owned by the state-owned investment arm, China International Trust and Investment Corporation. Other shareholders in the company include State-owned Assets Supervision and Administration Commission (SASAC) and CE-SCM.

“This will help us to enter the enterprise and VPN market in China which was a missing link in our global communication strategy,” said Srinivasa Addeppalli, Chief Strategic officer of Tata Communications.

"The acquisition is part of our global strategy to enter the high-enterprise markets in the emerging countries. Many other Tata group companies have presence in China, which will help us to know the market better," he said.

Tata Communications is planning to integrate its enterprise services along with its global managed services offerings.

CEC provides Virtual Private Network connectivity reach to 347 cities in China, including Beijing, Shanghai, Ghangzhou and Shenzhan. Tata Communications has a VPN presence in 120 Indian cities and 19 other countries across North America, Europe and Asia.

VPN is used to separate the traffic of different user communities over an underlying network with strong security features. CEC recently bagged a nationwide IP-VPN service license in China.

Tata Communications shares were down 2.83 per cent or Rs 12.25 to close at Rs 421 at the BSE on Wednesday when Sensex was down 1.75 per cent or 274.59 points to close at 15422.31.