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Cable/Video

VSNL Buys Into Broadband

Having completed the integration of Teleglobe International Holdings Ltd. (Nasdaq: TLGB), Indian powerhouse Videsh Sanchar Nigam Ltd. (VSNL) (NYSE: VSL) is back on the acquisition trail, this time to beef up its domestic broadband operations.

On Monday, VSNL announced it has bought Direct Internet Ltd. (DIL) and its Primus India subsidiary for 750 million rupees (US$16.7 million), and now the carrier has reportedly picked up the Internet business of 7 Star, a cable operator based in Mumbai. (See VSNL Buys Primus India.)

According to an Indian media report, VSNL will acquire 7 Star for around R80 million ($1.8 million) and will continue shopping around to expand its presence in the broadband space.

The country's largest private provider of fixed wireless broadband, Direct Internet serves enterprise customers and will remain a separate subsidiary, while Primus offers retail services and is likely to be absorbed into VSNL. Seven Star customers will also be switched over to the Tata Indicom brand.

Traditionally strong in the dial-up Internet market, VSNL has seen subscriber numbers fall as India's Internet users switch to broadband services with rival carriers.

Rather than build out its own fixed broadband network, the company has partnerships with various cable service providers across India, and in some cases it's shelling out cash to help them lay more cable. It's also made several previous acquisitions, including DishnetDSL and Tata Power Broadband. To tackle the access problem, VSNL is also in the process of rolling out wireless broadband equipment from Aperto Networks Inc. (See VSNL Deploys Aperto.)

The relationships with cable operators will no doubt prove an advantage when VSNL needs content for IPTV service, which it's starting to explore with equipment and content providers.

— Nicole Willing, Reporter, Light Reading

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