Tata Communications is all set to merge its fully owned broadband subsidiary Tata Communications Internet Services with itself.

According to a communication to the stock exchanges, the company's board of directors has approved ‘a scheme of amalgamation'.

Analysts say that the move was on the cards, especially after TCIS dropped out of the race to clinch broadband wireless access spectrum in the auctions conducted by the Government last year.

One of the main reasons for the formation of TCISL was to dilute up to 26 per cent stake to strategic partners. In March 2008, reports that Temasek Holdings, could pick up a stake in TCISL, were refuted by the company.

However, the inability to clinch broadband spectrum hurt TCISL's stake sale plans. Along with TCISL, Reliance WiMax, Vodafone and Spice Internet did not make it to the final list of players for the broadband spectrum, in an auction which generated Rs 34,554 crore for the government.

Cloud offering

Separately, Tata Communications has launched its infrastructure-as-a-service (IaaS) cloud offering, Instacompute, in Singapore. The idea is to cover neighbouring countries Malaysia, Hong Kong, Thailand, Indonesia, Vietnam and the Philippines.

“Singapore businesses are aggressively adopting innovative business technologies that will allow them to leapfrog on to the international stage… the pay-as-you-use service enables Asia-Pacific businesses to quickly and easily tap into scalable, global IT infrastructure via the Internet, without the usual cost and complexities associated with IT provisioning,” Mr Vinod Kumar, Managing Director and CEO of Tata Communications, said in a statement.

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