Vanco vanquished: India's Reliance buys ailing UK virtual network operator

by Stuart Corner

Tuesday, 27 May 2008

Page 1 of 3 ! India's Reliance Communications' subsidiary, Reliance Globalcom, has acquired ailing UK based virtual network operator Vanco for $US76.9 million. Vanco aims to compete with global network operators like AT&T, BT and Verizon without owning any underlying network infrastructure and, until recently, had been very successful albeit on a much smaller scale than the global players. A year ago it as named by Frost & Sullivan as the most promising service provider of the year in Asia Pacific . When Vanco's woes became public earlier this month, Ovum predicted its demise and identified flaws in its business model but nevertheless predicted that it would continue to be viable: "The VNO model is here to stay, and after causing widespread disruption that has been healthy for the industry, it now looks as if the VNO has found it niche where commercial and technology centralisation and flexibility are the client's primary drivers." Now, as part of the massive Reliance group which will be able to exploit considerable synergies with its existing businesses Vanco's virtual model looks set to be even more disruptive to the global network services business of AT&T, BT and Verizon, at least two of which were reported to have been in the running to buy the company. Reliance, India's second largest telecoms operator, said that Vanco's existing longer term contracts would add $US365 million revenues annually to its Globalcom unit. "The acquisition of Vanco is in line with Reliance Globalcom's vision to create one of the top five global data communications enterprises in the world," said Anil Dhirubhai Ambani, chairman of Reliance Communications. Indian press reports, citing company sources, claimed that Reliance had beaten 12 other bidders including AT&T, BT and Cable & Wireless to buy Vanco. Reliance Globalcom was formed in February 2008 to consolidate the global businesses of Reliance Communications, primarily the Flag global submarine cable network and Yipes, a US-based managed ethernet services provider that was acquired by Reliance in mid 2007. CONTINUED << First page <   1 2 3 Next page > Last page - Post your comment >>

 

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