France Telecom arm Orange buys GTL unit

Orange Business Services, the business communications arm of France Telecom

Orange Business Services, the business communications arm of France Telecom, has bought the enterprise network services and managed services business of GTL in an all-cash deal. GTL is among the top companies in the country providing managed services to call centres and BPO firms. The two companies have not, however, disclosed the size of the deal.

This is the second acquisition in this space in recent months. Earlier, BT bought i2i, another Mumbai-based company in managed services, for about $100 million. Standard Chartered was the lead advisor for GTL, while BMR Advisors was the advisor and due diligence partner for France Telecom.

The acquisition of GTL’s managed service division will help Orange establish itself as a major player in this segment. It will get the benefits of a significant customer base, dedicated sales force, skilled professionals and relationships with leading technology providers in the enterprise networks space.

GTL has over 450 customers and a major presence in the BFSI and ITeS segments. Some of its clients include Citibank, Standard Chartered, Deloitte, WNS and First Source. The company also has relationships with leading technology providers such as Alcatel-Lucent, Nortel, Juniper, Patchlink, Arc Sight and Verint in the enterprise space. GTL is one of the oldest partners of Nortel and has a leadership position in the Contact Center space. The business serves customers from 13 locations in India and internationally in countries like the US, the UK, Singapore and Sri Lanka.

The enterprise and managed services business of GTL recorded revenues of over Rs 140 crore in fiscal 2006-07 and has over 590 employees. They include more than 200 engineers, trained in various skill sets in converged solutions, data technologies and infrastructure management.

The proposed divestment is not likely to impact the revenue growth of GTL. According to GTL chief operating officer (COO) Charudatta Naik, “The growth guidance given to 30 per cent is based on the Network services in the telecom domain and does take into account the hive-off of the enterprise segment. We have already shared our order visibility of Rs 1,600 crore, which is purely based on telecom services.”

The hiving off of the IT Services business is part of the ongoing restructuring programme through which the company wants to focus solely on network services. It intends to add capabilities across the entire spectrum of the Network Life Cycle of Telecom Operators and Technology Providers.

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Orange Business Services CEO Barbara Dalibard said, “India is a key growth market for our customers. The acquisition of GTL’s enterprise and managed services divisions broadens our ability to deliver best-in-class enterprise services and solutions for our customers throughout the region, including customers in India.”