Tata Communications has announced that it intends to acquire 100% of BitGravity, a company in which it already holds a stake, for an undisclosed amount. Tata Communications and Allen & Company (a financial investor) are the two main stakeholders in the company. Thus, Tata Communications will be buying out the company and any residual stake held by the company’s employees.
In March 2008, Tata Communications invested $11.5mn in BitGravity to tap on its high quality content of video delivery, and in turn provide excellent market reach. BitGravity claims to have built the first content delivery network for interactive broadcasting, to deliver high quality video on demand, live broadcasts and interactive applications for large audiences through the internet. Content delivery has become a significant business opportunity, as people have begun to access more video content online, and growing broadband penetration makes it possible to deliver high quality content seamlessly.
In September 2008, Tata Communications launched BitGravity’s CDN service on a worldwide basis. Tata Communications sells the service to companies in sectors such as gaming, media and content companies. Some of its clients are NDTV, IAH Games, Quick Heal Technologies and Nimbus Communications. Tata Communications organises its business in divisions such as global voice, global enterprise and carrier data, among others.
With consolidated revenues of over Rs11, 000 crores in FY’10, the company is well equipped to ensure the performance of BitGravity post the acquisition. Tata Communications hopes to better the marketing of the company, and also aims at reducing the overall cost of BitGravity. It intends to fully invest in the potential of this business and accelerate development of new features and services, said Genius Wong, senior vice president, global network services, Tata Communications. For BitGravity, the advantages are faster growth and benefiting from scale, according to Perry Wu, CEO and co-founder.
Read the press release from Tata Communications on the acquisition here.