ST Telemedia acquires majority stake in Indian data centres
Wed 26 Oct 2016
Singapore Technologies Telemedia has completed a joint venture with Indian communications conglomerate Tata, giving ST Telemedia 74% of Tata’s India and Singapore data centre business.
ST Telemedia has acquired Tata Communications’ 14 colocation data centres in India and three in Singapore, with Tata remaining as a significant shareholder, retaining 26% of the business.
The deal is valued at $170 million USD.
When the deal was announced, Tata said in a statement that it would retain a stake in the data centre business, but that the deal with ST Telemedia would allow Tata to focus on the development of IP, cloud and unified communications services, which it intends to offer as a part of its advanced managed services portfolio.
Managing Director and CEO of Tata Communications, Vinod Kumar said, “This new joint venture partnership will now allow us to hone our strategic focus on advanced services within the data centre that enable digital transformation for our customers, in addition to infrastructure services. Our new partnership also gives us the opportunity to redeploy capital behind other areas of our business, to further broaden the portfolio of services we can offer to meet our customers’ current and future requirements.”
Prior to this sale, Tata owned and managed approximately one million square feet of data centre space worldwide. ST Telemedia’s acquisition of the India and Singapore data centre business will help the company expand its footprint in the growing data centre markets in India and China.
Tata is not exiting the data centre business entirely, maintaining a significant share of the ST Telemedia business as part of the joint venture, and with no announcement of plans to sell the other 27 data centres that it currently owns worldwide.
The conclusion of this deal, first announced in May, comes immediately following the news that Tata Group had removed Chairman Cyrus Mistry without explanation. While the search for a replacement continues, Ratan Tata has returned as interim Chair. In a statement regarding the change in leadership at Tata Group, Mr. Tata said, “The companies must focus on their market position vis-à-vis competition, and not compare themselves to their own past. An institution must exceed the people who lead it.”