The Hindu Business Line : Smaller telcos eye global acquisitions

New Delhi, May 8 It’s not just the large Indian telecom companies that are looking at international acquisitions. Home grown smaller telecom firms such as Tulip IT and Kavveri Telecom are now scouting for buy outs in a bid to expand their footprint into the global markets.

While Tulip IT is planning to acquire a company in the managed services space, Kaveri Telecom is eyeing companies which can add to its portfolio of radio frequency equipment used by cellular operators.

“We are looking at acquisitions ranging between $50 million and $100 million to expand our reach to markets like the US and the UK. We want to replicate our success in the Indian market in the international market,” said Lt. Col. H S Bedi, Chairman and Managing Director, Tulip IT Services Ltd.

The company is the market leader in India in providing data connectivity across 1,200 cities and is planning to expand its network to cover all the villages over the next two years. It has a 28 per cent market share of the Rs 1,080-crore Virtual Private Network market in India and has a market capitalisation of around Rs 2,500 crore. Tulip is also adding three more date centres in Bangalore, Chennai and Hyderabad which will be used by global majors such as AT&T and Orange Business Solutions. The company wants to take its growth story to other markets.

“We have a very unique business model which has enabled us to be nimble and at same time operate at lower costs than our competitors in India. The US and Europe are huge markets for data services and we want to have a share of that market,” Col Bedi said.

Bangalore-based Kavveri Telecom, manufacturers of antennas and radio frequency products for the wireless industry, wants access to high-end technology through acquisitions. The company closed this financial year at over Rs 150 crore against Rs 50 crore the previous year and the reason for the rise in turnover has been because of inorganic growth.

In the past 18 months, Kavveri has made five successful international acquisitions – Til-Tek (Canada), DCI (Canada), Sigma Wireless (Ireland), Spotwave Inc (USA) and Spotwave Inc (Canada). These were all loss making units that Kavveri took over and successfully turned into profitable entities within the first financial year itself.

“Kavveri has been successful in bringing high end technology and products through its various acquisitions into the country and believes that the demand for state-of-the-art RF and Antenna products will continue. In lieu of the same Kavveri is ever watchful for any further international acquisitions. We are looking at more such opportunities to address constant and ever increasing demand of the telecom industry,” said Mr. C. Shivakumar Reddy, Managing Director, Kavveri Telecom.

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