India’s Tata Communications, part of the Tata Group – India’s biggest multinational conglomerate - is leaving little room for speculation on its long-term plans for growth.

The company, which is reported to be considering a cash bid for UK telecommunications and hosting company Cable & Wireless is also considering spinning off its data center business to make it easier to attract investment.

According to the Economic Times, Tata said it only has a 7% market share for its colocation and managed hosting business operating in the three main cities that are expected to see 80% of the growth in India’s colocation market over the next five years – Delhi, Bangalore and Mumbai.

It currently serves 19% of the Indian colocation market with a footprint of 350,000 sq ft in ten Tier III facilities, through more than 700 clients in India.

It said by spinning off its data center business, it would more easily gain the investment required to increase its presence in key growth areas.

Tata Communication’s data center business is valued at Rs500 crore (about US$9.7m) and Tata said it requires a further investment of about Rs1500 crore in the next five years.

The Economic Times quoted a proposal put forward by Tata. It said: “Given the increased competition in the market, it is imperative that the company expands its facilities and creates capacity to serve expected demand. In particular, we would need to ramp-up capacity in Delhi, Bangalore and Mumbai within the next 12 to 18 months and the Capex for this expansion is expected to be Rs400-500 in the financial year 2012-13,"

Meanwhile, Tata Communications Limited is expected to bid £1bn for UK-based Cable & Wireless Worldwide (CWW). Bidding for the company will close on Thursday.

Vodafone is also bidding for CWW, and according to reports, Tata Communications has £2bn set aside for what could turn into a bidding war.