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PCCW's Indian unit acquires BPL's Internet business

The Indian unit of Hong Kong's Pacific Century Cyberworks group has taken over the loss-making Internet service business of India's BPL Innovision group, company officials said on Thursday.

Data Access (India) Ltd, PCCW's Indian unit, will take the 12,000-odd dial-up and 100 corporate leased-line subscribers of BPL Innovision, which operates cellular, Internet and broadband services, company officials said.

Siddhartha Ray, managing director of Data Access, said the company would pay nothing to take the subscribers of Bplnet.com, although the deal would generate cost savings for BPL Innovision.

"BPL had a fixed cost of running the business, which it can now save, while this gives us a presence in key markets which we had not explored," Ray told Reuters by telephone from New Delhi.

BPL's exit from the Internet business comes after cut-throat competition between the country's Internet service providers has more than halved Internet access charges in the last two years.

Data Access, a venture of Hong Kong's dominant telecoms carrier PCCW and Delhi-based SPA Enterprises, which Ray controls, launched Internet access services in India under the NOW (Network of the World) brand name a year ago.

Besides give it access to some markets in southern India, the acquisition will also provide Data Access a ready-made market to sell bandwidth to corporate customers, Ray said.

A late entrant in the Indian market, Data Access offers services in four main cities and currently has about 145,000 subscribers, Ray said.

"We are still losing money but not as badly as many of the other players, Ray said, adding that the firm expected to break even shortly.

For BPL Innovision, "the retail Internet business is getting very, very commoditised and we have decided to focus on offering value-added services to our mobile customers," said R Ramesh, head of marketing at Bplnet.com.

State-run Videsh Sanchar Nigam Ltd and Satyam Infoway Ltd are among a handful of companies that account for the lion's share of the country's fast-growing ISP business, which has an estimated three million subscribers.

Data Access has already invested about Rs 1.4 billion ($29 million) in India. It has set up 12 Internet gateways in four cities and supplies bandwidth to about 12 ISPs, Ray said.

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