Sify to take Wipro network clients

By Suresh Seshadri

CHENNAI: Satyam Infoway Ltd., one of India's largest Internet service providers, said it would acquire all 200 corporate network services customers of Indian software giant Wipro Ltd.

NASDAQ-listed Satyam Infoway (SIFY), which has 500 of its own customers in this segment, did not disclose how much it would pay Wipro for taking over these customers.

But R. Ramaraj, managing director of the Madras-based Satyam Infoway, told a news conference Wipro's corporate network services were worth 280 million rupees ($5.7 million) in the year ended March, while SIFY's were worth over 800 million rupees.

"We have decided to acquire Wipro's corporate connectivity customers without acquiring any liabilities, assets or employees," he said.

"Corporate services are one of our most profitable businesses and we have leadership here. This acquisition, which will not include any goodwill in the value of the deal, will help us grow this business and reach $100 million in overall revenues faster."

The announcement made before markets opened in the United States, sent the loss-making SIFY's ADRs 25 percent higher to $0.6 in early trade.

Network services, which are part of the broader corporate services business, help companies run software applications across offices in different locations.

SIFY's corporate services business, which includes other services such as hosting services, voice-based communications and messaging, contributed slightly more than half of its April-June revenue of $8.3 million.

Ramaraj said he expected this business to grow by more than 30 percent in the current year to March 2003.

Wipro sees gain

Wipro, for its part, decided to migrate its network services customers to SIFY and wind up its service because it no longer wished to run an extensive physical network, says Ishwar Hemrajani, chief executive at Wipro Infotech's Technology Products Division.

"It is a clear win-win-win for all three parties," he said.

"Our customers gain from the larger and better countrywide infrastructure of SIFY, we now focus on our core competency of providing our top corporate customers managed services and other high-value services from Bangalore and SIFY gets our customers."

© Reuters