The company, which makes Internet telephone equipment for the corporate market, said it is paying US$18 million for an additional 25 percent of Tata Telecom. Tata Telecom had been controlled by the Tata Group, one of India's largest conglomerates. The Tata Group and Avaya created Tata Telecom in a joint venture almost eight years ago. The deal gives New Jersey-based Avaya slightly more than 50 percent stake in Tata Telecom.
Avaya's additional US$18 million investment is "to do business in India" supplying Internet Protocol-based telephone systems to businesses, Horn said. Avaya doesn't have overseas sales offices, so it makes deals with telephone companies in India, Europe and Asia, Horn adds.
A U.S. company's expansion overseas is likely to trigger fears of offshore outsourcing in which U.S. jobs are transferred to lower-paid workers, usually in developing nations. Much of the recent news about technology firms' operations in India has involved laid-off U.S. workers being replaced by cheaper Indian staffs.
However, Horn was quick to say the Tata Telecom deal would not result in Avaya jobs moving overseas.
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