Firms could garner biz worth $65m from outsourcing and strategic partnership deal

By Amit Roy Choudhury , Business Times
3 Aug 2004

SINGAPORE-BASED Orient Networks, one of the largest privately-held telecommunications network service providers in Asia , has expanded its reach after striking an outsourcing and strategic partnership deal with India-based network integrator Network Solutions (Netsol).

The partnership will form the basis of future growth of the two companies and they expect to garner business worth around $65 million within the next 18 months, starting from September, executives of the two companies said.

Orient Networks - formerly known as XA TMI - provides data communications services as well as direct Internet services to mainly mid-tier multinational companies operating in Asia . According to Orient Networks' marketing head Tony Nash, the deal with Netsol will give Orient Networks operational efficiency and will allow it to scale up its operations.

'Both companies see this as a vital partnership in delivering enhanced service offerings to the growing regional and global market in information and communications technology (ICT),' Mr Nash said.

Under the outsourcing deal, which is valued at $2 million over the next couple of years, Orient Networks will move its network operations centre and a few other jobs done in Singapore to Netsol's offices in India.

'The reason we are doing this is not necessarily for cost savings, it's more in terms of scalability,' Mr Nash said, adding: 'We have a really talented workforce here and these guys will be able to do more complex tasks, with the network operations being managed by Netsol.'

The companies have also worked out a joint global strategy which will build on each other's core competencies and provide a strong foundation for a longer-term alliance and go-to-market strategy, Mr Nash said.

Orient Networks and Netsol will together offer traditional telecom capacity products as well as enterprise value-added services such as network management, security and outsourced messaging, he added.

The companies plan initially to target traditional multinational enterprises, plus the Asian regional mid-market companies, as well as small- and medium-size business (SMB) markets through a combination of service offerings.

'Subsequently, specific industry markets will be added as conditions and opportunities develop, in order to ultimately provide global solutions capability via the strategic alliance,' Mr Nash said.

Orient Networks started as XA Alliance in July 2001 and in December 2001 launched services in Singapore , Hong Kong and Japan . In April 2002 it acquired Tele Media International, Asia-Pacific (TMI) from Telecom Italia, and the company was renamed XA TMI.

In March this year it changed its name again to Orient Networks. It has a presence in most countries in Asia as well as Australia and New Zealand and has a staff strength of 120, of which about 70 are based in Singapore . According to Mr Nash, its revenue is just under US$50 million.

'This partnership extends our Indian presence and also positions us ideally in the global market,' Kim Odhner, chief operating officer of Orient Networks said. Netsol has about 1,000 people in India .

The companies are evaluating the development of offerings in segments such as ICT infrastructure, application management, mobility, workplace solutions and contact centre services. 'The approach will include the creation of a common service delivery model that is designed to improve the technical alignment across both companies in order to deliver, both together and separately, seamless ICT services,' Mr Nash said.