UK-based carrier Cable & Wireless said Monday that its Indian operation has signed an asset sharing agreement with Indian operator Bharat Sanchar Nigam Ltd (BSNL).

Under the memorandum of understanding, both companies will share their networks and other telecom infrastructure, allowing BSNL to expand its global network and giving C&W a better foothold in India.

The firms will also offer each other a full suite of telecom services including basic, leased line and local lead services, Multiprotocol Label Switching (MPLS), Virtual Private Networks (VPN) services, internet, Very Small Aperture Terminal (VSAT), mobile and broadband services on a preferred client basis.

“BSNL is focussing on broadband, network monitoring and managing MPLS networks for big corporates as the next big growth area. We have plans to invest roughly $10bn on network expansion over the next three years,” said Kuldeep Goyal, chairman and managing director of BSNL.

The move comes ahead of an expected break up of C&W, after the struggling company revealed it had been considering a demerger in May.

The company confirmed it was considering a “demerger, rationalisation of the portfolio or leveraging and returning capital to shareholders” as its options and intends to put a strategy into action in a 2008 – 2009 timeframe.

It is rumoured a break up plan could be announced before month end, seeing the company split into a UK business and an international operation.