The Hindu Business Line : Global buys: GTL puts in place Rs 1,000-cr plan

New Delhi May 30 Network services provider GTL Ltd has put in place a war chest of Rs 1,000 crore for acquiring companies abroad in a bid to enhance its telecom services offering. The company is eyeing at least four different companies in the areas of network planning and design, network operations and maintenance and professional services.

GTL had recently acquired Genesis Consultancy Ltd, a UK-based network services provider, for $9 million (over Rs 40 crore) in an all-cash buyout to increase its third generation (3G) mobile capabilities.

Restructuring proposals

According to sources close to the company, the aim is to increase its expertise in the telecom space. The company, listed on the BSE and the NSE, is also selling off its non-telecom business as part of the plan.

To start off the restructuring, GTL's IT managed services division with 400 employees is going under the hammer. At least four companies have already evinced interest in buying out the division. The deal is expected to bring around Rs 200 crore to GTL, with which the company is planning to offer fresh dividend or offer buy back schemes to its shareholders. GTL is also planning to sell off its Business Process Outsourcing unit keeping in line with its focus on the telecom services segment.

Turnkey projects

The company, set up in 1987, has been undertaking projects on a turnkey basis for mobile operators and equipment vendors. It has set up nearly 20,000 towers for various companies so far.

GTL's revenues at the end of March 31, 2007 stood at Rs 11,576 crore and net profit at Rs 100.35 crore compared with Rs 749.6 crore and Rs 72.37 crore respectively in the previous year. The company has orders worth Rs 1,600 crore for the year 2007-08 of which Rs 1,152 crore is expected from projects in India.

GTL is doing projects in 25 countries at present and it plans to expand its operations to 25 more by 2010. The company had recently hived off its cellular tower business as a separate company as GTL Infrastructure Ltd. This division is planning to roll out over 6,000 towers by 2008 across the country, which will be leased out to mobile operators for fixed rentals.

In the cellular towers business, GTL faces competition from the likes of Quippo and operators including Reliance Communication and Bharti Airtel.

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