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11/6/2006
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AT&T Targets Outsourcers With India Long Distance Service

AT&T will target U.S. and foreign multinationals that have farmed out business functions to low-cost subsidiaries in India.

Businesses that have outsourced tech support, customer service, or back-office functions to a subsidiary in India will soon be able to tap a familiar name in the telecom business to connect to those operations. AT&T said Monday that it will launch an Indian joint venture company that will provide network services to multinationals operating in the country.

Under the plan, AT&T will take a 74% stake, the maximum allowed by Indian law, in AT&T Global Network Services India, which it will operate in partnership with local firm Mahindra Telecommunications. AT&T officials say the newly formed company will target U.S. and foreign multinationals that have farmed out business functions to low-cost subsidiaries in India. "Outsourcing is big business in India, so that is our target market," says Sanjiv Baghat, CEO of AT&T Global Network Services India. The company intends to primarily offer voice, video, and data services over virtual private networks that businesses can use to create secure links between far flung offices. It will also offer internal long distance services within India to multinationals operating within the country. "Many of our international customers [in India] want the same company to handle domestic services," says Baghat.

AT&T Global Network Services India will begin operating later this year or early in 2007, Baghat says. He declined to offer revenue projections for the first year. The company spent a total of $1.1 million to acquire licenses to operate the international and domestic long distance services. AT&T currently has about 80 employees spread across five cities in India, but Baghat says that number will increase substantially once the new venture is established.

AT&T isn't the only company that's looking to bring communications services to India's booming tech economy. Yahoo says it plans to offer Internet telephony to consumers in India through a subsidiary, Yahoo Internet Communications India. Under Indian law governing foreign investment, the online giant would have to find a local minority partner to take at least a 26% stake in the venture.

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