The Hyderabad-based Tata Teleservices Ltd and Chennai-based C Sivasankaran controlled Dishnet DSL Ltd have entered into a symbiotic agreement which will see them sharing infrastructure, and a co-location agreement across the country. The agreement was signed about a month back and financial terms of the agreement are still being worked upon.

The move will also help Tata Teleservices offer basic telephony (fixed line) services in Tamil Nadu, where it is still awaiting Government permission for digging roads and laying cables. The agreement is also expected to help Dishnet piggy back on Tata Tele's vast national backbone to offer digital subscriber loop connectivity to corporate customers.

Interestingly, VSNL, which was acquired by Tata Telservices last year, does not have a specific DSL offering and, hence, there is no conflict of interests for Tata Teleservices.

S Ramakrishna, managing director, Tata Teleservices said, "We have a co-location commercial agreement with Dishnet to use our  infrastructure for last mile connectivity." However, he refused to divulge details regarding commercial arrangement between the two companies.

"Tata Teleservices is working out a deal with Dishnet, which involves a mutual arrangement for sharing of infrastructure, and a co-location agreement. There is no transfer of equity from any of the parties to the other, as such agreements are fairly common in the industry," top Tata sources in Mumbai said.

The co-location arrangement between the Tatas and Dishnet is expected to kick start operations in Hyderabad.

World over, DSL connectivity is offered by an Internet service provider in conjunction with a telecom company. Dishnet DSL had according to sources tried to strike a relationship with BSNL but failed.

Under the agreement, Dishnet will deploy digital subscriber line access multiplexer units in all Tata Teleservices telephone exchanges. The DSLAM unit can provide DSL connectivity in a radius of about 2.5 kilometers from where it is deployed. Dishnet has about 25,000 customers all over India.

For the Tatas, the infrastructure sharing deal also makes tremendous sense as it gives them the opportunity to roll out fixed-line services in Chennai and adjoining areas, using the existing network of Dishnet, where competitors like the Mittal controlled Bharti Group have made huge inroads mopping up corporate and residential customers.

Dishnet has underground fibre in Chennai and surrounding areas which has not been 'lit' (not yet operationalised). According to sources in the company, this fibre would now be 'lit' and the Tata's can use it to offer basic fixed line services to customers in the city.

It is also reliably understood that C Sivasankaran has infused close to Rs 100 crore into Dishnet about a couple of months back.