France Telecom trying to counter VSNL: Ovum

Ovum in its analysis on France Telecom acquisition of GTL. says France Telecom seems to have been a bit late shopping in the Indian market for ICT assets to support its global managed services.

These operations have capabilities in IP PBX and WAN/LAN integration as well as CRM systems and remote network management.

They had revenues estimated at 21m in the last financial year, and 591 personnel will transfer to Orange Business Services, which will then have a complement of more than 1,590 staff in India.

Full Commentary of Analysis by David Molony, Principal Analyst, IP enterprise at Ovum

Cable & Wireless formed a venture with Reliance Infocomm as long ago as February 2004, investing $10 million in a national data network. AT&T, in partnership with Mahindra Telecom, last year acquired a national long distance licence which it said it would use to support multinational companies based in India.

And in February this year BT acquired i2i Enterprises, an IP services provider based in Mumbai ('BT adds another piece to its Indian jigsaw', EuroView Daily, 7 February 2007).?

However, there is more to this than global rivalry between the major western telcos. These telcos are beginning to notice a growing presence ? India's own global aspirant VSNL. VSNL has built a global carrier network in quick time; acquiring the Tyco Global Network in 2004, and the former Teleglobe in 2005.

More recently, VSNL has started to show interest in developing national infrastructure and service capabilities. Last year it set up a virtual network operator, Cipris, to serve multinational companies in Europe, and based the VNO in Paris. It even appointed a former senior manager of Equant to head the business.

VSNL has ambitions in other markets like South Africa, where it has a stake in the second national licence holder building a fixed network to compete with Telkom SA.

But it is steadily acquiring a profile as a global managed services provider. VSNL's international division is looking to acquire and build data centres in the UK, out of which it will offer hosting services to compete with Europe's big players in their back yard. VSNL International boasts a single data management platform across the VSNL global network, driven from a 24x7x365 network operations centre in Chennai.

With new data centres in prospect, effectively VSNL will offer a combination of local and offshored centres across a standard service provider network. Although it terms this as an applications-ready infrastructure, for the moment it will concentrate on hosting customers' IT operating systems. Applications management is still under evaluation, which will come as a relief to France Telecom and its peers.