Mumbai: A unit of France Telecom bought the IT services business of India’s GTL Ltd. on 11 July, in an attempt to gain more customers there.
France Telecom unit Orange Business Services did not disclose the purchase price, although Chief Executive Barbara Dalibard said: “It is slightly more than the division’s one year revenues.”
In 2006/07, GTL’s enterprise and managed services business reported revenue of more than Rs1.4 billion.
“This acquisition will strengthen our presence in India and enhance key capabilities in network related services,” Dalibard said.
Network services contributed 20% to Orange’s revenue of 7.65 billion euros in 2006 and the aim is to take it to 30% by the end of 2008, Dalibard said.
After the deal, Orange Business Services, which has 230 customers in India, will have more than 1,500 employees in the country.
“India will be the centre of excellence in customer relationship management and network services,” she said.
The company has also spent 20 million euros on its major services centre in Gurgaon, near the Indian capital New Delhi.
Focus on Core Business
GTL said the sale was part of its plan to focus on its main network services business.
After the sale, GTL’s revenue would range between Rs14.5 billion and Rs16 billion, and earnings before interest, tax, depreciation and amortisation would be between Rs1.9 billion and Rs2.2 billion in the financial year ending March 2008, Chairman and Managing Director Manoj Tirodkar said.
GTL also planned to sell its back-office operations, which, along with some other software services and intellectual properties, should fetch around Rs2.5 billion, he said.
These businesses would be put into a separate unit before their sale, a process Tirodkar expected would be completed in the next three months.
GTL was looking for acquisitions in Europe in network services, and a deal is likely to be closed in the first half of 2007/08, said S.K. Roy, deputy chief operating officer of GTL.
The potential targets are almost as large as GTL, which has a market capitalisation of almost $585 million, he said.