Intel to invest $49 million in IndusInd broadband venture

Intel Capital is investing close to $49 million in the Hinduja-run IndusInd Media as it makes its forays into the brave world of broadband and Internet delivery. The players involved have gone if for a convoluted structure for the investment. Intel Capital is actually picking up a 49 per cent stake in Grant Investrade Pvt Ltd, a subsidiary of Hinduja Finance, which in turn is owned by the Hindujas. The remaining 51 per cent stake in Grant Investrade continues to stay with Hinduja Finance.

Grant Investrade holds 3.5 percent in IndusInd Media & Communications Ltd (IMC) and will increase its holding to 6.7 percent by directing the investment from Intel into IMC. IMC operates under the brand name IN CableNet.

Intel Capital's ultimate total investment could be increased up to 20 percent in IMC. The investment is subject to Indian regulatory clearances.

"This investment reflects Intel's ongoing commitments to enable rapid deployment of high-speed Broadband internet access on a world wide basis", said Claude Leglise, Intel's Vice President and General Manager, Intel Home Products Group. "We have decided to participate in IN CableNet, India's largest Multi-Systems Operator (MSO), based on IN CableNet's unique market positioning, the company's vision, capabilities and our common objectives for the Indian broadband market segment".

IN CableNet is the only corporate effort in India, to build the information super highway, with the first 550 MHz cable system, being up-graded to Broadband network with fiber optic trunks. It offers high quality multi-channel transmission to more than four million Indian homes. It is classified amongst the 10 largest Cable TV Operators in the world in terms of subscribers. The network operates in nine cities with market leadership. In Mumbai, it claims to serve over 80 percent of the cable market and in the principal cities of Delhi, Bangalore, Hyderabad and Ahmedabad, it has a claimed over 60 percent of the Cable & Satellite market segments.

Ashok P. Hinduja, Chairman, Hinduja Finance, recently announced the Group's "TMT" strategy continuing to create value through the convergence of Technology, Media and Telecommunications. "We believe this relationship with Intel will add significant momentum to IN CableNet 's deployment plans of Broadband to strengthen the Group's leadership position in the convergence space."

"This investment is strategically important to Intel South Asia, it reflects the importance we place on developing Broadband infrastructure to address the growing demand for internet access in the Indian market," said Avtar Saini, Director of Intel South. "Over the past 15 months, we have invested in 15 companies in India. Today's announcement is the largest Foreign Direct Investment (FDI) in Indian Broadband infrastructure and reflects our commitment to invest in India's growing technology sector".

The IN CableNet success story has taken five years, said A. K. Das, Chairman, IndusInd Media & Communications. "With its market segment leadership position and its dynamic management, the company will now exponentially grow to expand operations on a nationwide basis," he said. "The IN CableNet infrastructure will be enhanced with state-of-the-art technology to make convergence a household reality. We are excited about this new association with Intel Capital, which will enable IN CableNet to continue to maintain the technological edge."

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