Tata Comm signs $1.5-bn deal with British Telecom

Updated: Jun 27 2009, 03:57am hrs
British Telecom (BT) Group and Tata Communications (Tata Comm) have signed a five-year agreement worth about $1.5 billion. As per the deal, Tata Comm will become BT's primary supplier of international direct dial (IDD) and other voice termination services outside BT's own footprint countries, i.e., barring a few European nations. Also BT will become Tata Comm's main distribution channel for its IDD traffic into the UK, expanding into other markets across Europe as the relationship matures.

In terms of operations, due to the partnership, we are expecting about 20-25% increase in our international traffic. This will come once the entire BT traffic is transferred to our networks which will take about a couple of months, said a company official from Tata Comm. Last year, the traffic on the Tata Comm IDD was 24 billion minutes. With the deal, the company is expecting an increase of about 6 billion minutes annually. Revenues from voice constitute about 57% of the total Tata Comm's revenues.

The agreement will increase both partners' competitiveness and will enhance our respective service offerings. We are also very excited to have BT as our main distribution channel in the UK as we are confident that BT's resources and strong knowledge of the European market will be of great benefit to Tata Comm, said Michel Guyot, president (global voice solutions), Tata Comm. BTs entire traffic (as per the agreement) is expected to migrate to Tata Comm network by the end of this calendar year.

By providing each party with access to additional capacity and flexibility, the relationship will allow BT and Tata Comm to benefit from each others' strengths as they develop and grow their businesses in their respective markets.