Tata Group has announced that its subsidiary Tata International has signed an equity joint venture agreement (EJV) with the shareholders of China Enterprise Communications Limited (CEC) for acquiring a 50 percent stake in CEC.
Beijing-based CEC, according to Tata’s statement, is a value-added telecoms services provider and had recently been awarded a nationwide IP-VPN service license by the Chinese government.
Chinese state financial conglomerate CITIC Group along with State-owned Assets Supervision and Administration Commission (SASAC) and CE-SCM are the majority shareholders of CEC.
The deal requires approvals from regulatory and government in communist China.
Tata also claims the joint venture is the first-of-its-kind in the Chinese telecom sector after China became a member of World Trade Organization (WTO).
“China and India are driving the 21st century world economy. 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,” said Zhu Jianhua, president and CEO of China Enterprise Communications Limited.
An integrated IT solutions provider, CEC provides VPN connectivity reach in 347 cities in China, and has significant presence in tier-one cities like Beijing, Shanghai, Guangzhou and Shenzhen. India’s Tata Communications' VPN presence is spread about 120 Indian cities and 19 other major business capitals in North America, Europe and Asia.
“Tata Communications understands and respects the complex, fast-changing and extremely competitive Chinese telecom environment. This is an innovative step in our ongoing effort to enable connectivity and managed services across strategic regions and emerging markets,” said Vinod Kumar, president, Data and Mobility Services, Tata Communications.
The Tata Communications portfolio includes transmission, IP, converged voice, mobility, managed network connectivity, hosted data center, communications solutions and business transformation services. Operating from its offices in 80 cities in 40 countries worldwide, Tata Communications has a strategic investment in South African operator Neotel .
Tata Communications is a part of the $29 billion Tata Group, a household name across Indian subcontinent.
Source: TMC Net