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Tata Comm scraps venture with Chinese co
11 June 2010: Tata Communications has called off its plan to form a JV with Beijing-based China Entercom Communications (CEC) due to lack of clarity on the Chinese Government's consent for the deal.
In June 2008, Tata Communications had signed an equity JV agreement with the shareholders of CEC for the acquisition of 50 per cent equity interest in the latter. With telecom a restricted sector in most economies, the JV was awaiting approval from the relevant government and regulatory bodies in China.
CEC is a value-added telecommunications services and integrated IT solutions provider. It was awarded a nationwide IP-VPN service licence by China's Ministry of Information Industry, making it the first telecom valued-added service licence granted to a non-facilities-based service provider.
Recently, India barred mobile phone operators from placing orders with China's Huawei Technologies and ZTE Corp because of security concerns, a move which has clouded its relations with the China Government.
Indian security agencies are worried that Chinese equipment may have spying technology embedded to intercept sensitive conversations and government documents and that could endanger national security.
Source: Hindu Business Line