Tata Communications to acquire 50% of China Enterprise Communications

Tata Communications has signed an equity joint venture agreement with the shareholders of China Enterprise Communications (CEC) for the acquisition of a 50% equity interest in CEC. The joint venture, which will become effective after the necessary approvals from the relevant government and regulatory bodies in China are obtained, will be the first of its kind in the Chinese telecoms sector. ‘The strategic cooperation between China Enterprise Communications and Tata Communications was carried out under the background [sic] of economic globalisation, and the fact that China and India are driving the 21st century world economy. Through the cooperation with Tata Communications, we will focus on the development of the domestic market to provide high quality networking service to multinational enterprises in China as well as China's domestic enterprises. We intend to grow the strength of the China Enterprise Communications brand,’ said Zhu Jianhua, President & CEO of CEC.

CEC is a value added telecoms services and integrated IT solutions provider headquartered in Beijing. CEC was recently awarded a nationwide IP-VPN service licence by the Ministry of Information Industry (MII), the first such concession to be granted to a non-facilities based service provider. CEC has network reach throughout China, with no regional restrictions on its service capabilities. CEC provides VPN connectivity in 347 cities in China, including Beijing, Shanghai, Guangzhou and Shenzhen. This reach complements Tata Communications' VPN presence in 120 Indian cities and 19 other major business capitals in North America, Europe and Asia.

As it stands, CEC is majority owned by state-owned investment arm CITIC (China International Trust and Investment Corporation); other investors include SASAC and CE-SCM. Tata Communications' investment in CEC is subject to various closing conditions as well as approvals from the relevant Chinese governmental and regulatory bodies, including but not limited to the MII and the Ministry of Commerce.