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February 13, 2009

Tata Communications to spend $430m to boost infrastructure

Indian telecoms firm Tata Communications is investing $430 million in an Asian Internet data centre and cable system, AFP quoted the firm as saying Thursday.

"These investments are a key part of the company's commitment to enhance its robust global infrastructure as part of its $2 billion expansion plan over three years," it said in a statement.

The data centre, the Tata Communications Exchange, will be operational in 2010 and will host servers and store data for the gaming sector, content providers and others, company officials said at a news conference.

"The Asian market continues to be promising, even in the current economic environment," Vinod Kumar, president and chief operating officer for Tata Communications, said in the statement.

The company said it has already completed the "main segment" of the 250-million-dollar cable system -- linking Singapore, Hong Kong, Japan, Vietnam and the Philippines -- to provide increased data and voice reliability in the region. Known as the TGN-Intra Asia Cable System, it spans 6,700-kilometres (4,150 miles).

"It increases data and voice reliability by providing new route diversity for traffic generated throughout and into Asia Pacific," the statement said. Tata officials told reporters the undersea network will provide a link between Chennai in India, the Asia Pacific and the United States.

They said its route will avoid an earthquake zone that, in late 2006, left millions of people across Asia without full Internet services after a 7.1-magnitude earthquake hit Taiwan.

The quake disturbed several massive submarine cables linking the region with the US and beyond. Beh Swan Gin, managing director of Singapore's Economic Development Board, said the investments "represent a strong vote of confidence for Singapore, and underline the growing partnership between Tata and Singapore."

Tata Communications is part of India's Tata group, whose chief Ratan Tata last month urged top management to defer all "avoidable expenditure and growth plans" to confront the global financial crisis which has severely affected the group, the Hindustan Times quoted him saying in an an email to staff.

Asked about the reported comments, Kumar said the company will "move and seize that opportunity" when it sees a chance to consolidate the firm's position. "We've consciously chosen the areas that we want to pursue even in this environment," added Srinath Narasimhan, managing director and CEO of Tata Communications.

"And we're being very careful about how we take hold of opportunities and where we put what amounts of money in what effort." Narasimhan declined to give details on how the data centre and cable project are being funded except to say it was through "various capital-raising options, either as notes or equity".

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