BT in India move with takeover of fixed-line firm

Click to follow

BT has become the largest foreign fixed-line operator in India after it snapped up local player i2i Enterprise to double the size of its business in the subcontinent.

BT is the latest British telecoms company to step up its investment in the world's fastest growing telecoms market, with Vodafone preparing a massive bid for Indian mobile operator Hutchison Essar.

However, BT's acquisition of i2i internet communication service cost a fraction of the $17bn that Vodafone looks set to splash out on Hutchison Essar.

Mumbai-based i2i has assets of only $22m and employs 200 staff. BT did not reveal what it had paid to acquire the company. Yet Andy Green, the chief executive of BT Global Services, said that he has high hopes for i2i as the Indian carrier is doubling in size every year.

"It is a fantastic platform to grow from," Mr Green said, adding that BT would invest tens of millions of dollars in i2i over the coming years on top of the $500m it already spends in India each year.

BT expects its Indian unit to grow sales to $250m within two years. The company aims to double the revenue it derives from the US, Japan, India and China to a combined $1.9bn by 2009 as its Global Services unit continues to win sizeable deals with multinational customers. BT is expected to announce that it has won a £571m contract to manage the telecoms needs of investment bank Credit Suisse this week.

Mr Green said that BT is keen to increase its capability in India because more of its multinational customers are investing in the country. "India has become such a crucial location for all our customers. BT wants to make doing business in India as easy as it is in London or New York," he said. He expects the acquisition to bolster its customer base and help attract new customers in the world's fastest growing telecoms market.

BT offers a variety of internet-based telecoms services in India after it obtained the Indian government's permission to sell directly to customers in December last year. The company offers services through its joint venture with New Delhi-based Jubilant Enpro in which BT owns a 74 per cent stake.

The British company also owns a 32 per cent stake in Indian IT services company Tech Mahindra and has a formal partnership with the country's largest mobile phone operator Bharti Airtel.