ata Communications (TCL) is set to acquire Sri Lanka’s second-largest land-based telephone company Suntel. TCL (formerly VSNL), which was acquired by the Tatas following the government’s divestment in 2002, has received the approval of the government, which still owns 26% stake in the company, for the proposed acquisition.
The Indian firm had submitted the bid last month and is in advanced negotiations with Suntel, a senior government official familiar with the development said. According to documents available with ET, the acquisition will be routed through the company’s wholly-owned subsidiary Tata Communications Lanka. “TCL intends to acquire 100% of Suntel, Sri Lanka, with a view to providing domestic data services wireless network and to access local customer business,” says the company’s business plan.
One of the key reasons for the proposed acquisition is the change in the business plan by TCL. The company, which has till now been in inbound voice business, plans to enter the outbound voice traffic and data business. The Indian company is also looking for enterprise businesses, said a person familiar with TCL’s business plan. TCL also has long-distance and internet service provider licences in Sri Lanka.
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