Tata Communications Announces $2 bln Global Expansion

The remaining $500 million would be invested for WiMax operations, which were launched in Bangalore. The company would also be launching the services in other cities, starting with Chennai, Delhi and Hyderabad in the next few months, he added.

Another $1 billion would be invested in multi-protocol label switching (MPLS) and rolling out ethernet networks across the world. "This will ensure a scalable and secure network, through which the company will provide advanced services," the official said.

The company is expected to launch a $4-5 million advertising blitz in the next three months through direct marketing initiatives to communicate the integration of its businesses to the market.

Like all companies using the Tata brand name, Tata Communications will have to pay Tata Sons a fee of 0.25 percent of revenues or 5 percent of profits before tax annually under a brand equity and a business promotion scheme.

The NYSE-listed Tata Communications, which has offices in 80 cities in 40 countries worldwide, competes with telecom majors such as BT, AT&T, iBasis and Verizon in its international operations, and with companies such as Bharti Airtel and Reliance Communications in India.

The company bought network service firm Teleglobe International 2006 and Tyco International's global undersea fiber optic cable network unit in 2005. Presently it is witnessing higher contributions from China, Europe and Africa, where it has invested in South Africa's Neotel.

Presently, the company is in the process of completing additional submarine cable systems connecting emerging markets in Asia, the Middle East and Africa to Europe to meet the demands of broadband and enterprise customers over the next five to eight years.

Tata Communications is a part of India's most respected business conglomerate, the Tata Group, which has business interests that include steel, automotive, technology, consumer products, energy, hospitality and beverages.

The Tata Group reported revenues in 2006-07 of $28.8 billion, about 3.2 percent of the country's GDP, and a market capitalization of $65.32 billion. The Tata Group has 27 publicly listed enterprises and operations in more than 80 countries across six continents and employs over 300,000 people.