UPDATE 1-India Tata Communications to spend $2 bln globally
(Adds outlook, quotes)
MUMBAI, Feb 13 (Reuters) - Indian telecoms firm Tata Communications (TATA.BO) (TCL.N) will spend $2 billion over the next three years to expand globally as it seeks to boost overseas revenue, a top official said on Wednesday.
The company, formerly Videsh Sanchar Nigam Ltd VSNL.BO VSL.N, is building undersea cables between Asia and Europe and also across Asia, including in a consortium cable system between India and France.
"We are seeking to grow our enterprise services business globally," Managing Director N. Srinath told a news conference. "Within India, we are building in-city infrastructure and focusing on broadband."
He said $500 million would be invested in undersea cables, and a similar amount in network services. The remainder would be spend on enhancing its value-added service capabilities.
Tata Communications shares provisionally rose 5.4 percent 472 rupees in a firm Mumbai market that rose 2.5 percent.
New York-listed Tata Communications has been expanding into network services for companies and broadband after the Tata group in 2002 took over the state-run monopoly for international calls, whose earnings took a hit from falling call tariffs.
Last month, it said net profit plunged to 95.2 million rupees for the December quarter from 1.4 billion a year earlier despite total revenue rising marginally to 11.14 billion rupees from 11.12 billion.
The company had acquired network service firm Teleglobe International Holdings Ltd in 2006 and Tyco International's (TYC.N) global undersea fibre optic cable network unit a year earlier.
Tata is boosting its bandwidth capabilities as it sees higher contributions from emerging markets like China, parts of Europe and Africa, Srinath said.
"We are well on track to achieve our target of 15 percent annual revenue growth across all businesses by 2011/12, along with 20 percent-plus operating margins," he said.
Tata competes with telecoms majors such as BT (BT.L), AT&T (T.N), iBasis (IBAS.O) and Verizon (VZ.N) in its international operations, and with companies such as Bharti Airtel (BRTI.BO) and Reliance Communications (RLCM.BO) in India.
Earlier on Wednesday, another company official told Reuters it had formed a partnership in China that would enable Tata's global clients gain access to customers in China. See: [ID:nBOM28419] ($1 = 39.8 rupees) (Reporting by Prashant Mehra and Himangshu Watts; Editing by Ranjit Gangadharan)
