Sify Technologies Defers Planned Merger of Its Subsidiary Sify Communications

Retaining Separate Identities for Enterprise and Consumer Services
in Current Environment
CHENNAI, India--(Business Wire)--
Sify Technologies Limited (Nasdaq: SIFY) announced today its
decision to defer the merger of its subsidiary Sify Communications.
With the Board decision on Wednesday 20th August 2008 to this effect,
Sify Communications, which holds National Long Distance (NLD) and
International Long Distance (ILD) licenses will continue to conduct
the VPN and voice services of the company, while Sify Technologies
will conduct the international and consumer services of the company.

Mr M P Vijay Kumar, CFO, Sify Technologies, said, "Upon reviewing
the current environment and the opportunities that may unfold from
government regulation and policies, retaining separate identities for
the enterprise and consumer sides of the business will likely benefit
the company in terms of licensing, growth and expansion. Areas such as
Voice over Internet Protocol in the domestic market being opened up
and the new spectrum policy that is to be announced are opportunities
that could benefit the company going forwards. We believe the company
will be better positioned to seize opportunities given the current
regulatory policy landscape by deferring the merger."

The proposed merger, approved by shareholders on March 08, is
pending before the High Court of Madras in India for formal approval.
The withdrawal of the merger now is not expected to materially affect
the financial performance of the company going forwards. It is
expected to benefit the company from a strategic point of view with
regard to future opportunities that are expected to materialize. The
option of merging the two entities will be reviewed in future
depending on the business and policy environment and the benefits that
could accrue from a merger at that time.

The withdrawal of the merger also means that the capital infusion
from the Indian investor of the transferor company, will not be
required, and therefore dropped. Both entities will fund the capital
expenditure from cash available with the company, internal accruals
and other means as and when required. Investment options continue to
be evaluated based on the business case given the current inflationary
environment leading to an economic slowdown and the goal to be
profitable from operations.

About Sify

Sify is among the largest Managed Enterprise and Consumer Internet
Services companies in India, offering end-to-end solutions with a
comprehensive range of products delivered over a common telecom data
network infrastructure reaching 500+ cities and towns in India.

A significant part of the company's revenue is derived from
Corporate Services, which include corporate connectivity, network and
communications solutions, security, network management services,
enterprise applications and hosting. Sify is recognized as an ISO
9001:2000 certified service provider for network operations, data
center operations and customer support, and for provisioning of VPNs,
Internet bandwidth, VoIP solutions and integrated security solutions,
and ISO 27001 certified for Internet Data Center operations. Sify has
licenses to operate NLD (National Long Distance) and ILD
(International Long Distance) services and offers VoIP back haul to
long distance subscriber telephony services. The company is India's
first enterprise managed services provider to launch a Security
Operations Center (SOC) to deliver managed security services. A host
of blue chip customers use Sify's corporate service offerings.

Consumer services include broadband home access, dial up
connectivity and the e-port cyber cafe chain across 180 cities and
towns. Sify.com the consumer portal of Sify has sub portals like
www.samachar.com, www.walletwatch.com, www.sifymax.com and
www.chennailive.in, www.bangalorelive.in, www.mumbailive.in,
www.hyderabadlive.in the city based live video on the web. The content
is available in 5 Indian languages, which include Hindi, Malayalam,
Telugu, Kannada and Tamil.

For more information about Sify, visit www.sifycorp.com

Forward Looking Statements

This press release contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended. The
forward-looking statements contained herein are subject to risks and
uncertainties that could cause actual results to differ materially
from those reflected in the forward-looking statements. Sify
undertakes no duty to update any forward-looking statements.

For a discussion of the risks associated with Sify's business,
please see the discussion under the caption "Risks Related to Our
Business" in the company's report on Form 6-K for the Quarter ended
December 31, 2007 which has been filed with the United States
Securities and Exchange Commission and is available by accessing the
database maintained by the SEC at www.sec.gov.

Sify Technologies Limited
Investor Relations
David Appasamy, +91-44-2254 0770 Ext. 2013
david.appasamy@sifycorp.com
or
Grayling Global
Investor Relations
Truc N. Nguyen (ext. 418) or Christopher Chu (ext. 426)
+1-646-284-9400
tnguyen@hfgcg.com or cchu@hfgcg.com
or
Grayling Global
Media Relations
Stacy Dimakakos, +1-646-284-9417
sdimakakos@hfgcg.com

Copyright Business Wire 2008