Chandra to call on DoT secy today

Tata Sons Chairman Natarajan Chandrasekaran ( pictured) will meet Department of Telecommunications (DoT) officials including Telecom Secretary Aruna Sundararajan on Tuesday to discuss, sources said, Tata Communications’ plan to take the enterprise business of Tata Teleservices.

The government has around 26 per cent in Tata Communications, earlier known as Videsh Sanchar Nigam Ltd (VSNL), and DoT approval is required to acquire a new business.

Tata Communications in October last year had expressed its intention to acquire the enterprise business of Tata Teleservices, whose mobility business was sold to Bharti Airtel virtually free.

Industry watchers value Tata Teleservices’ enterprise business, which has a vast fibre network, in the range of ~50-60 billion.

However, sources said it was to be decided at what price Tata Communications would buy it.

Hiving off the mobility business of Tata Teleservices, which had been making huge losses over the past few years, was one of the major decisions of Chandrasekaran after he became chairman of Tata Sons in February last year.

Tata Teleservices was on the block for the past few years but no deal materialised because the company’s debt of around ~340 billion was a major obstacle.

At the time of the announcement of the deal with Airtel, Tata group Chief Financial Officer Saurabh Agrawal had said the Tatas would either have to invest ~8-10 billion or exit the business.

“From a capital allocation perspective we thought that we had lost that position where we could invest more,” Agarwal had said.

Chandrasekaran had said the deal with Airtel for Tata Teleservices’ mobility business was the best and most optimal solution for the Tata group and its stakeholders.