Sify wins the Frost & Sullivan Market Leadership Award 2005-06 for IP VPN services

Company's leadership of the IP VPN market in India recognized for third consecutive year

Chennai, October 17, 2006: Sify Limited (NASDAQ: SIFY), a leader in Consumer Internet and Enterprise Services in India with global delivery capabilities, was awarded the prestigious Frost & Sullivan Market Leadership Award for IP VPN Markets 2005-2006 today for the third consecutive year.

The award was given based on Sify's strong performance in fiscal 2005-06 with its market share in the VPN space in India at 37.2 percent. Sify acquired many important clients in different market segments during the year. The Frost & Sullivan Market Leadership Award also acknowledges Sify's customer orientation, technology capabilities and reach.

On receiving the award, Mr. Raju Vegesna, MD & CEO, Sify Limited said, "We are delighted to be awarded the Frost & Sullivan Market Leadership Award for IP VPN Markets for the third year in a row. The award is, first and foremost, a testimony to the trust our customers place in our services. It is also a strong recognition of team Sify across our technology and enterprise services teams, who have together built our strong market presence with the highest standards of service delivery and technology capabilities. It is our intention to build on these achievements to continue to lead the market with services that are at the leading edge and will enable our customers to use IT for competitive advantage".

Mr. Alok Shende, Director, ICT Practice, Frost & Sullivan India, said, "The momentum in VPN adoption is strong as ever. Making it to the top of the table for the third year in a row is a feat in itself for Sify, especially, with the market witnessing Telcos playing keener role."

Frost & Sullivan recognizes outstanding industry achievements by presenting the Frost & Sullivan Awards to leading companies in regional and global markets. These prestigious awards are recognized worldwide by the media, the investment community and end-user markets. Using interviews with all market participants and extensive secondary research of proprietary data, Frost & Sullivan analysts track competitor revenue and market share of industry verticals. Competitors are then compared and ranked.

According to Frost & Sullivan, the IP VPN market in India in 2005 was estimated to be at $151.9 Million, a growth of 53.2 percent over the previous year. It also anticipates continuing high growth in the years 2006 to 2011, with Multi Protocol Label Switching (MPLS) driving the IP VPN markets, largely due to an ability to offer frame relay features at lower-costs. Frost & Sullivan expects the IP VPN market to grow at a Compounded Annual Growth Rate (CAGR) of 30.9 percent between the years 2005 and 2011. Frost & Sullivan expects the Indian VPN service market to grow to $213.9 million in 2006 and $764.7 million in 2011.

Sify developed India's first private IP network between the major cities in the country in 1998. The company has continued its pioneering role by being one of the first to offer IP VPNs, MPLS IP VPNs, and other value-added services. Today over 1100 corporate customers entrust the running of their business critical applications as diverse as SAP, BAAN, Oracle, CRM and ERP solutions over Sify's world class backbone network.

About Sify Limited:

Sify is among the largest Internet, network and e-Commerce services companies in India, offering end-to-end solutions with a comprehensive range of products delivered over a common Internet backbone infrastructure. This Internet backbone reaches 175 cities and towns in India. A significant part of the company's revenue is derived from Corporate Services, which include corporate connectivity, network and communications solutions, security, network management services and hosting. A host of blue chip customers use Sify's corporate service offerings. Consumer services include broadband home access, dial up connectivity and the iWay cyber café chain across 154 cities and towns. The company's network services, Data Center operations and customer relationship management are accredited ISO 9001:2000.

For more information about Sify, visit www.sifycorp.com.

Forward Looking Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The forward-looking statements contained herein are subject to risks and uncertainties that could cause actual results to differ materially from those reflected in the forward-looking statements. Sify undertakes no duty to update any forward-looking statements.

For a discussion of the risks associated with Sify's business, please see the discussion under the caption "Risks Related to Our Business" in the company's report on Form 6-K for the quarter ended June 30, 2006 which has been filed with the United States Securities and Exchange Commission and is available by accessing the database maintained by the SEC at www.sec.gov.

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