France Telecom is set to acquire network service provider GTL’s IT business for about Rs 250-300 crore. The acquisition, to be made through France Telecom’s business arm, Orange Business Services, would mark the group’s first acquisition in India.
ET has learnt that France Telecom pipped British Telecom, Washington-based EMW and a host of system integrators to emerge the frontrunner in the race to acquire GTL’s IT business. The deal is expected to be announced next week.
When contacted, France Telecom refused to deny or confirm the development. However, a source close to the development said, “Orange Business Services, the business arm of France Telecom Group, is in advanced stage of negotiations with GTL to acquire its enterprise and managed services division.”
A spokesperson for Mumbai-based GTL said, “No such agreement has been signed. It would be premature to comment on the deal prior to its signing.”
GTL had recently put its IT business on the block after deciding to focus on the core business of network services. The IT business currently contributes 20-25% to the Rs 1,156-crore company’s revenues. The IT division provides managed services, enterprise management solutions and networking services.
France Telecom is the No 3 mobile operator and No 1 provider of broadband internet services in Europe and a leading global telecom service provider. Orange Business Services represents the business communications solutions and services provided by the group including converged voice, data & mobile services and IT expertise and managed services.
France Telecom Group had consolidated sales of 51.7 billion euros in 2006. Following this deal, GTL plans to sell its BPO and ERP businesses in the next phase. The proceeds of the sale of the IT business are expected to fund the company’s acquisition plans in the network services space.
Source : Economic Times