Wipro Net awaits KPN move on joint venture

By : |November 29, 2000 0

BANGALORE: The Internet services firm of the Wipro Group is bracing for
changes in its ownership after the recent decision of its joint venture partner
Dutch KPN Telecom NV to bow out of Asia.

"KPN has recently said that they want to focus more on Europe and get
out of Asia. But so far, they have not made a specific proposal (about the joint
venture)," Suresh Senapaty, Wipro’s corporate executive vice president for
finance, told Reuters.

"We know they may come up with something…they may want to withdraw
from the venture or reduce their stake or may want to continue without making
any further investments," Senapaty said.

India’s diversified Wipro Group, whose flagship firm is Wipro Ltd., is a
leading information technology conglomerate with interests in consumer products.

Last year, Wipro and KPN set up Wipro Net in which KPN had said it would
invest about $16 million and take a 45 per cent stake.

Wipro, which owned the remaining 55 per cent, later sold about eight per cent
of the firm to financial institutions.

Wipro Net provides Internet services to Indian businesses and had launched
retail Internet access services earlier this year. The firm is estimated to have
about 60,000 retail Internet access customers.

Last week, KPN said it would wind down its activities in Asia as it was
facing enormous pressure at home.

Hans Van Moorsel, KPN Asia’s managing director, told Singapore’s Business
Times newspaper that KPN was in negotiation to dispose off its investment in
Wipro Net.

Indian newspapers on Wednesday speculated that Wipro was considering selling
Wipro Net to US energy giant Enron Corp which is eyeing India’s Web-related
areas for future growth.

Wipro’s Senapaty said Wipro and Enron had an ongoing relationship in several
areas but there was no proposal to sell Wipro Net to Enron.

"We are discussing how we can work together since Enron has interests in
broadband and data centers," Senapaty said.

(C) Reuters Limited 2000.

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