No plans to merge businesses: Tata Communications

Srinivasa Addepalli, Senior VP of Corporate Strategy, Tata Communications , said there were no plans to merge the company's international long-distance (ILD) business with the rest of the business. "We have our strategies and plans for the next year and we are well on track to execute those. At some point, there may be opportunities to look at if there is merit in integration; we have said in the past that that's a long-term direction," Addepalli said, adding, "I also think there is huge opportunity for growth both in the Indian market and the overseas market and our focus is to make sure we win in the market place."

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Here is a verbatim transcript of the exclusive interview with Srinivasa Addepalli on CNBC-TV18. Also watch the accompanying video.

Q: A lot is happening in terms of capex in your rival companies and global reach as well. So let's ponder on these issues-what is the capex plan at Tata Communications. The buzz out there is that you are out to raise money. Are you?

A: The capex plans for Tata Communications have been in line with what we had articulated earlier. We had talked of USD 2 billion projects between FY09 and FY11. We have spent about USD 600 million in FY09. We believe the FY10 capex should be of similar magnitude of about USD 500-600 million and the rest will come up in FY11. It is also subject to when the spectrum auctions will happen and at what price we end up bidding for Worldwide Interoperability for Microwave Access (WiMAX) spectrum.

In terms of raising money, we are looking at all avenues. In recent times we have used debt as the primary source of external funding. We also have internal cash that our business generates which is used to fund most of our capex but whenever there was a gap  we have been using long-term debt as a source of funding and I think that will continue in the near-term.

Q: Is there some big project that is coming your way. The buzz in the market is that you probably getting some order on Wi-Fi enablement. Is there anything like that that we can expect in terms of an order?

A: We have been growing our WiMAX and Wi-Fi retail network in India. We have our WiMAX retail network in four major towns and across country. So that's a kind of an ongoing expansion that's happening. The large wireless network orders would happen after the spectrum auctions, perhaps, later this year. We are getting prepared for those rollouts but it's just market speculation perhaps

Q: All your competitors are usually one integrated player. In your case of course you got an international long distance (ILD) business separately, the rest of the business separately. What are the chances you stand with the information you know right now that Tata Communications will be merged in the next 12 months, if you have any information at the moment?

A: There is no imminent plan to merge the Tata group's communications businesses as we have our strategy and plans for the next year and we are well on track to execute those plans. At some point, there may be opportunities to look at if there is merit in integration; we have said in the past that that's a long-term direction. But I also think there is huge opportunity for growth both in the Indian market and the overseas market and our focus is to make sure we win in the market place.

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