India's ITI Is up for Grabs

12:45 PM Government-owned vendor is being carved up for sale

June 4, 2009

2 Min Read
India's ITI Is up for Grabs

12:45 PM -- India's state-owned telecom equipment supplier, ITI Ltd. , is being carved up and sold off, according to this Economic Times report.

The government has initially asked for expressions of interest in three of ITI's six business units, though investors will be sought for all six. Joint venture deals as well as outright sales are to be considered, according to the report.

The major appeal for any possible buyers is the close relationship ITI has with state-owned carriers Bharat Sanchar Nigam Ltd. (BSNL) and Mahanagar Telephone Nigam Ltd. (MTNL) , which account for 80 percent of the vendor's revenues, according to the Economic Times. ITI supplies all sorts of hardware and software to the duo, from the optical core to customer premises equipment.

In what could be seen as something of a stitch-up, 30 percent of equipment contracts awarded by the two government-owned operators should go to ITI, although that ratio has not been strictly enforced following pressure from the operators, according to an earlier Economic Times report.

ITI could have multiple suitors. The company has: a mobile network infrastructure alliance with Alcatel-Lucent (NYSE: ALU); a next-generation networks (NGN) equipment relationship with Huawei Technologies Co. Ltd. to address BSNL's NGN requirements; a WiMax relationship with fellow Indian vendor Telsima, which is now part of Harris Stratex Networks Inc. (Nasdaq: HSTX); a GPON partnership with Alphion Corp. ; and CDMA and DWDM deals with ZTE Corp. (Shenzhen: 000063; Hong Kong: 0763).

— Catherine Haslam, Asia Editor, Light Reading

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