Nortel picks up stake in Sasken for $10 m

Nortel has pumped $10 million into the Bangalore-based Sasken Communications Technologies for an undisclosed stake, its first equity investment in India.

Both the companies have also signed an amendment to an existing services agreement under which they will continue to work together to develop new software and deploy Nortel networking solutions.

Sasken Communications chairman and chief executive officer Rajiv Mody said the company plans to use the investment to fuel its growth through acquisitions. "Nortel has been a customer of Sasken for 15 years and this investment strengthens the relationship," he added.

Sasken, which has been involved in telecom research and development (R&D) outsourcing, has been a key supplier to Nortel since 1991, and is focused on supporting Nortel's global system for mobile communications digital wireless and enterprise communications solutions.

Sasken is expected to play a significant role in training, technical support and other engineering services for Nortel's project in India.

Nortel India managing director Ashoka Valia said, "In Nortel's scheme of things, India and Asia Pacific markets have been growing rapidly. We will need partners to help us grow here and especially in GSM and enterprise networking which is a growth areas for us, Sasken demonstrated the necessary expertise. This initiative aligns with our company's objective to bring greater capability to customers here."

Sasken Communication Technologies also has plans to raise Rs 100-150 crore through an initial public offering this year to fund its expansion. It wants to expand its facilities and increase the headcount by 1,000 to 3,300 by the end of the next financial year.

Sasken has four development centres - three in Bangalore and one in Pune - and is exploring the possibility of setting up a fifth centre in India.