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Gemplex buy proves to be golden goose for VSNL
Mumbai, Apr 18: The acquisition of US-based Gemplex Inc has proved to be beneficial for Videsh Sanchar Nigam Ltd (VSNL), as the Indian telephony giant is believed to have recovered the entire investments within a year of the buy and four months of commercial deployment of the latter`s assets.
Mumbai, Apr 18: The acquisition of US-based Gemplex
Inc has proved to be beneficial for Videsh Sanchar Nigam Ltd
(VSNL), as the Indian telephony giant is believed to have
recovered the entire investments within a year of the buy and
four months of commercial deployment of the latter's assets.
The Tata Group-company has bagged orders worth thrice the
acquisition cost and with similar revenues are in the
pipeline, Gemplex buy would be accretive to its earnings by
fourth quarter of fiscal 2004, industry sources said here
today.
Confirming this, sources said VSNL has bagged over five major Information Technology-Enabled Service (ITES) clients in US, which use Internet Protocol Virtual Private Network (IP-VPN) networks for their voice and data operations. These revenues would help VSNL recover the acquisition costs, they added adding, with an expected increase in IP-VPN solutions and services, the company expects a similar growth in the next eight months.
VSNL had acquired the assets of Gemplex, a provider of IP-VPN services to companies which are on the periphery or outside the service area of large VPN service providers, in July 2003 for an undisclosed amount.
The commercial deployment of Gemplex's assets, which were set up by around 2000-01 with links to 15 countries from India to US, Europe and Far East, began in the last quarter of 2003.
Telecom analysts said that Gemplex buy has proved to be a "goose that lays golden eggs" as, if, VSNL has resorted to setting up a Greenfield Network of similar capacities, the gestation period would have been "much longer". The IP-VPN segment in US is growing by over 200 per cent and in the next three to four years the segment would have a revenue potential of Rs 400 crore, they said adding, VSNL expects to garner over 50 per cent of the total market share.
The internet gateway and services provider is also looking at IP-VPN as its vehicle to establish a global presence and expects the segment to fuel its future growth, they said.
Apart from selling IP-VPN network, VSNL would also deploy a part of the network capacity to enhance its product portfolio, the sources added.
Bureau Report
Confirming this, sources said VSNL has bagged over five major Information Technology-Enabled Service (ITES) clients in US, which use Internet Protocol Virtual Private Network (IP-VPN) networks for their voice and data operations. These revenues would help VSNL recover the acquisition costs, they added adding, with an expected increase in IP-VPN solutions and services, the company expects a similar growth in the next eight months.
VSNL had acquired the assets of Gemplex, a provider of IP-VPN services to companies which are on the periphery or outside the service area of large VPN service providers, in July 2003 for an undisclosed amount.
The commercial deployment of Gemplex's assets, which were set up by around 2000-01 with links to 15 countries from India to US, Europe and Far East, began in the last quarter of 2003.
Telecom analysts said that Gemplex buy has proved to be a "goose that lays golden eggs" as, if, VSNL has resorted to setting up a Greenfield Network of similar capacities, the gestation period would have been "much longer". The IP-VPN segment in US is growing by over 200 per cent and in the next three to four years the segment would have a revenue potential of Rs 400 crore, they said adding, VSNL expects to garner over 50 per cent of the total market share.
The internet gateway and services provider is also looking at IP-VPN as its vehicle to establish a global presence and expects the segment to fuel its future growth, they said.
Apart from selling IP-VPN network, VSNL would also deploy a part of the network capacity to enhance its product portfolio, the sources added.
Bureau Report