The Tatas-owned Videsh Sanchar Nigam Ltd (VSNL) announced the acquisition of the Chennai based Dishnet DSL’s internet service provider (ISP) division for Rs 270 crore in a slump-sale transaction.
The acquisition includes internet assets, employees and customers of Dishnet’s ISP division. The move will further consolidate VSNL’s position in dial-up space and marks its foray into the broadband business.
In a media statement, VSNL said it has signed a slump sale agreement with Dishnet to take over the narrowband and broadband businesses of Dishnet’s ISP division.
The transaction is subject to fulfillment of certain conditions and some legal formalities, which are expected to be completed soon, the statement said.
It is learnt that VSNL is also looking at acquiring Tata Power’s broadband business that has been recently hived off into a separate company.
V Srinivasan, chief executive officer & director of Dishnet DSL, part of the Sterling Infotech group said, “ This divestment is in line with our group’s strategy to focus on wireless communication business.”
Through this acquisition, VSNL will have access to over 600 owned and franchised cybercafes of Dishnet and the broadband assets having capacity to serve more than 50,000 customers in key cities in the country.
Further, VSNL will now cover dial-up services in 20 additional locations in addition to VSNL’s existing 30 locations of operation.
N Srinath, director (operations),VSNL said, “The acquisition will strategically help VSNL consolidate its presence in internet space under the Tata Indicom banner by enlarging its footprint and giving it a headstart in broadband Internet.”