Telecom network services provider GTL Ltd, part of the Global Group Enterprises, is set to acquire a European company.
A banker in know of the development said the acquisition would be in the network operations and maintenance space. The deal, valued at $200 million, is likely to go through in the next two quarters, he added.
However, Manoj Tirodkar, chairman and managing director, GTL told DNA Money, “We don’t want to comment anything on any particular buyout at this stage, but acquisitions are in our radar and whenever anything happens, the company will inform the exchanges.”
Tirodkar said the main objective of acquisitions was to strengthen the customer base in Europe and become a top-notch player in the network services business.
At an organic level, the company is focusing on high-margin segments like network planning and designing, infrastructure management and application management. As of H1FY08, it had reduced the share of network deployment to 68% from 75% in FY07. Going forward, it aims to get 30% of its revenues from GTL Infrastructure Ltd (GIL) through network deployment and maintenance.
GTL has split the business into two companies – GTL & GIL. GTL focuses on network engineering business, whereas GIL focuses on provision of infrastructure services.
The management expects revenues to increase by 30% year-on-year organically over the next three years.
Meanwhile, GTL has formed a strategic alliance with Ericsson UK to offer managed network infrastructure services to network operators and service providers in the UK. The two companies are expecting revenues of around Rs 1,560 crore in the next three years.
GTL has set up a special purpose vehicle (SPV) called GTL M&A Services, through which it will provide services like engineering, operation and management, designing and building of network infrastructure, apart from passive infrastructure. It currently holds 100% equity in the SPV but may divest some stake to Ericsson or potential clients or private equity in the next one year.
As per the agreement, Ericsson will outsource some of its network management and infrastructure contracts from large European players to GTL. It has set aside $100 million for capital expenditure.
It targets to deploy 1,000 towers and may deploy up to 5,000 towers by 2010. Research analyst Priyank Chandra and associate Gracy Mittal of Dolat Capital said in a note to clients on January 11 that GTL is evolving as an integrated network service provider and is best placed to capture the potential in the telecom network space.
Source: Economic Times