Tata Communications is realigning its broadband business. It is bringing its retail broadband unit under the ambit of small and medium businesses. The consolidation, it feels, will help to approach the market led by a portfolio of products.

In March 2007, it hived off its retail broadband business into a separate company, Tata Communications Internet Services. It had plans to bring in financial investors in the company and was in talks with Singapore government's investment arm Temasek Holdings . The share-sale was linked to Tata Communications Internet Services winning the broadband wireless access spectrum in the government auction held in May-June of last year. However, high auction prices prevented the company from bidding. As a result, the Vinod Kumar-led management now feels that it is better to merge the retail broadband unit back with the parent company.

The restructuring, say analysts, means that the NYSE-listed Tata Communications is de-focusing on the retail broadband business, while stepping up the focus on the small and medium businesses. The retail business unit contributes less than 6% to the company's Rs 11,026 crore revenues.

The company, part of the salt-to-software Tata Group , is at the centre of a controversy involving its 773 acres of land. The government wants the land to be separated from the company, formerly known as VSNL, with the centre holding 51.12% stake in the realty firm. The government privatized the international long distance call carrier in 2000 to the Tata Group. The Tatas own nearly 50% stake in Tata Communications, while the government owns 26%, as per the company's latest filings with the bourses. The land dispute and the government's unwillingness to infuse equity has been hurting the company's fund raising plans. As a result, it has been resorting to debt to fund its expansion and this has weighed down on the company. Its debt on books is $1.4 billion. The company is in the red for the last few years and the management has chalked out a multi-pronged turnaround strategy, betting on enterprise solutions including cloud computing.