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Sify Technologies Limited

Tidel Park, 2nd Floor

No. 4, Rajiv Gandhi Salai

Taramani, Chennai 600 113 India

(91) 44-2254-0770

www.sifycorp.com

March 16, 2009

VIA EDGAR

Division of Corporation Finance

Securities and Exchange Commission

100 F Street, N.E.

Washington, D.C. 20549

    Attention:

    Mr. Mark Kronforst

Accounting Branch Chief

Division of Corporation Finance

    Re:

    Sify Technologies Limited

Form 20-F for the Fiscal Year Ended March 31, 2008

Filed October 14, 2008

Forms 6-K filed January 23, 2009

File No. 000-27663

Dear Mr. Kronforst:

     This letter is submitted on behalf of Sify Technologies Limited (the “Company” or
“we”) in response to the comments of the staff of the Division of Corporation Finance of the
Securities and Exchange Commission (the “Staff”) as set forth in your letter (the “Comment
Letter”) to M P Vijay Kumar dated February 9, 2009 with respect to the Company’s Annual Report on
Form 20-F for the fiscal year ended March 31, 2008 (the “Annual Report”) and the Forms 6-K
filed on January 23, 2009. For reference purposes, the text of your letter has been reproduced
herein with responses below each numbered comment.

     This report contains translations of
some Indian rupee amounts into U.S. dollars at Rs 40.02
per USD $1.00, the exchange ratio in effect as of March 31, 2008.

Sify Technologies Limited

March 16, 2009

Page 2 of 14

Form 20-F for Fiscal Year Ended March 31, 2008

Risk Factors, page 17 “We may not be able to maintain our Nasdaq Global Market listing”:

Comment 1: Please tell us whether, as a foreign private issuer, you claim any exemptions from the
NASDAQ listing requirements. We note your disclosure on page 22 that you benefited from NASDAQ
requirements in connection with your initial public offering.

Response 1:

     As a part of our initial listing, we received the benefit of exemptions from the NASDAQ
corporate governance rules relating to shareholder meeting quorum, solicitation of proxies and
shareholder approval for issue of shares other than in a public offering, under Nasdaq Rules
4350(f), 4350(g) and 4350(i)(1)(D), respectively. We have not claimed any other exemptions from
the NASDAQ listing requirements.

     Nasdaq Marketplace Rule 4350(a)(1) permits foreign private issuers to follow home country
corporate governance standards in lieu of certain Nasdaq requirements. We continue to utilize this
exemption with respect to Nasdaq Rule 4350(f), regarding quorum requirements for stockholder
voting; Nasdaq Rule 4350(g), regarding the solicitation of proxies; and Nasdaq Rule 4350(i)(1)(D),
regarding shareholder approval of certain issuances of securities, and comply with Indian law with
respect to each of the foregoing.

Item.5.Operating and Financial Review and Prospects

Results of operations

Year ended March 31, 2008 compared to year ended March 31,2007

Revenues, page 37

Comment 2: We note your disclosure that cybercafé revenues decreased due to unexpected rent
increases on the cybercafé premises. Please clarify for us why an increase in rent resulted in
decreased revenue. Refer to authoritative accounting guidance as appropriate.

Response 2:

     The cybercafés are owned and operated by the franchisees. The franchisee procures the retail
space, invests in furniture, interior decor, personal computers, point of sale signage and
employs/trains the staff. The franchisee is responsible for the maintenance of the premises and
interface with customers. Sify provides the complete back-end support, including bandwidth, the
authentication / usage engine and the billing / collection system. Sify has discretion in
establishing prices and determines the service specifications. Sify also reserves the right to make
any change, alteration, modification in the services, business exploitation model, revenue
generation, models, charges, policies, specifications etc at its sole discretion and the same is
binding on the franchisee.

     Under the terms of the agreement, Sify is required to pay a commission at approximately 70% of
the revenue generated by the franchisees from internet usage at cybercafés. The revenue earned from
internet usage at cybercafés is recognised based on usage by the customer on a gross basis with the
corresponding commission being recorded as an expense.

     The aforesaid revenue recognition policy is based on the principles set out in IAS 18
“Revenue”.

Sify Technologies Limited

March 16, 2009

Page 3 of 14

     Although the number of cybercafés increased from 3,638 as at March 31, 2007 to 3,887 as at
March 31, 2008, there has been a decrease in the fully operational cybercafés from 2,629 as at
March 31, 2007 to 2,165 as at March 31, 2008. India witnessed significant increase in rentals for
premises during that year, and as a result, many of the franchisees scaled down or had nil
operations during the period under review. In view of the above, there was a decrease in the
cybercafé revenue during the fiscal year ended March 31, 2008.

     In our future filings, we will clarify the above relationship between rental costs and
cybercafé revenues and include disclosure regarding applicable revenue recognition policies.

Comment 3: You indicate that that your online portal and content offerings division experienced a
decrease in revenue in fiscal 2008 partially due to drop in corporate orders resulting from
management’s decision to slow down the growth of this business. Please tell us whether you consider
the revenue decrease to be a trend and, if so, how you considered providing enhanced disclosure as
to the expected impact of the trend and the basis for management’s decision. See Item 5.D.of Form
20-F.

Response 3:

     Revenue from corporate orders earned during the fiscal year ended March 31, 2008 amounted to
Rs 183 million (USD $4.57 million). Whilst this constitutes 87% of the total revenue from online
portal and content offerings, it represents only 3.5% of the total revenue of the Company for the
year ended March 31, 2008. Corporate orders operate with small profit margins and a large number
of orders are required. Due to the slowdown in the economic environment, the margins on some of
the orders were becoming unattractive. Management opted out of such orders resulting in lower
volumes. The revenue from corporate orders decreased by Rs 35.5 million (USD $0.89 million) as
compared to the previous year and did not have a material effect on the Company’s revenues. Given
that this business was not significant in the context of the overall business of the Company,
management believed that enhanced disclosures under Item 5.D. of Form 20-F was not considered
necessary.

     The Company will evaluate the materiality of the corporate orders and revise its disclosure in
future filings, as applicable and pursuant to Item 5D of Form 20-F.

Liquidity and Capital Resources, page 40

Comment 4: Your disclosure in this section does not appear to meet all of the requirements of item
5.B.1 of Form 20F. For example, you don’t provide a description of your internal and external
sources of liquidity or include a statement regarding whether you believe your working capital is
sufficient to meet your present requirements. You also do not discuss any of your borrowing
facilities although you disclose in Note 40 to your Consolidated Financial Statements that you have
unused lines of credit with several banks. Please advise.

Response 4:

     Our primary source of liquidity is from net cash earned from operating activities. As of
March 31, 2008, we had cash and cash equivalents of Rs.
1,506 million (USD $37.63 million) and other short-term
investments of Rs. 19 million (USD $0.47 million). Our external sources of credit include facilities sanctioned to us
by Indian banks. We have working capital facilities in the form of short term loans, cash credit
and overdraft facilities of Rs. 1,500 million (USD $37.48 million) out of which Rs. 650 million (USD
$16.24 million) had not been utilized as at March 31, 2008. Further, we were provided non-funded
limits of Rs. 1,250 million (USD $31.23 million) (primarily in the form of bank guarantees and
letters of credit) out of which Rs. 476 million (USD $11.89 million) remained unutilized as of the
reporting date. We believe that our cash and cash equivalents,

Sify Technologies Limited

March 16, 2009

Page 4 of 14

short-term investments and working capital lines are sufficient to meet our present working
capital requirements. However, our ongoing working capital requirements are significantly affected
by the profitability of our operations and we continue to periodically evaluate existing and new
sources of liquidity and financing.

     Information regarding utilization of our borrowing facilities has been disclosed in the
financial statements under notes 23 and 37 of our Annual Report. Similarly, our capital
commitments are disclosed under note 36 of our Annual Report.

     We note the Staff’s comment and will revise our disclosure accordingly in applicable future
filings with the SEC.

Comment 5: We note your disclosure that your accounts receivable increased in fiscal 2008 versus
fiscal 2007 due to more relaxed credit policies. Please explain to us the significant changes in
the terms of your policies that occurred in fiscal 2008. As part of your response, tell us whether
the changes to your credit policies represent a significant uncertainty related to your allowance
for doubtful accounts that requires additional disclosure pursuant to Item 5.D.of Form 20-F. In
addition, tell us how you evaluated any impact on your revenue recognition policies.

Response 5:

     While our credit policies vary across our different businesses, the credit policies for our
corporate customers have a significant impact on our receivable days. In fiscal 2007, our credit
policy for our corporate customers permitted a credit period of 90 days. Non-payment beyond the
credit period would generally result in disconnection and acted as a significant deterrent. The
economic environment in fiscal 2007 permitted us to generally ensure adherence to our credit
policies.

     In fiscal 2008, the economic environment became more competitive, which curtailed our ability
to strictly enforce our credit policies. Accordingly, even though as per the policy, the credit
period did not change in fiscal 2008 as compared to fiscal 2007, the average collection period went
up from 79 days (as of March 31, 2007) to 103 days (as of March 31, 2008).

     We estimate the amount of uncollectible receivables each period and establish an allowance for
uncollectible amounts. The amount of the allowance is based on the age of unpaid amounts,
information about the creditworthiness of customers, historical payment patterns, customer
concentrations, current economic trends and other relevant information. The assessments reflect
management’s best assumptions and estimates. We believe that the elongation of the credit
collection period has not created any significant uncertainty related to allowance for doubtful
accounts and thus no disclosure was contemplated under Item 5.D. of Form 20-F.

     We recognize revenue only when it is probable that the economic benefits associated with the
transaction will flow to the entity. Accordingly, no revenue is recognised unless it is considered
probable that payment will be received. Where uncertainty arises after the revenue has been
recognised, the uncollectible amount is recognised as an expense and not as an adjustment of the
amount of revenue originally recognised. We carefully monitor the movement in allowance for
doubtful accounts in each period to determine whether the change reflects uncertainty existing at
the time of recognition of revenue (resulting in revenue reversal) or whether the uncertainty has
arisen after the revenue has been recognized (resulting in a bad debt expense).

Sify Technologies Limited

March 16, 2009

Page 5 of 14

Item.6.Directors, Senior Management and Employees

Officer Compensation, page 48

Comment 6: The summary compensation table on page 48 indicates that several of your executive
officers received bonuses during fiscal year 2008. Please tell us if the bonuses were paid
pursuant to a bonus or profit sharing plan. If so, please provide a brief description of the plan
and the basis upon which your executives participated in the plan. See Item 6.B.1 of Form 20-F.

Response 6:

     The Company makes bonus payments to employees including executive officers upon satisfactory
achievement of the following two performance criteria.

          (i) Performance of the Company: Represents bonus payable on achievement of overall revenue
and net profit targets for the Company. These performance targets were not achieved for the year
ended March 31, 2008 and thus no bonus was paid under this category.

          (ii) Performance of the individual: Represents bonus payable on achievement of the
individual’s Key Responsibility Areas (KRA) and Key Performance Indicators (KPI). These KRAs and
KPIs vary in relation to each employee including executive officers and include both financial and
non-financial parameters.

     The aggregate bonus paid during the year ended March 31, 2008 under this category in respect
of employees including executive officers who have achieved the KRAs and KPIs was Rs. 16.49 million
(USD $0.41 million) of which Rs 4.76 million (USD $0.12 million) relates to executive officers.

     We note the Staff’s comment and will revise our disclosure accordingly in applicable future
filings with the SEC.

Comment 7: We note that you have not disclosed any amount that you have set aside or accrued to
provide pension, retirement or similar benefits to your directors or executive officers. See Item
6, B.2 Form 20-F, however, Note 4j to your Consolidated Financial Statements indicates that you
have a defined benefit retirement plan that covers all your employees. Please advise.

Response 7:

     As per the service contracts entered into with the employees (including executive officers),
the Company provides the following retirement benefits: (a) Provident fund contributions and (b)
Gratuity.

     Provident fund contribution is a defined contribution plan governed by a statute in India.
Under this, both employer and employee make monthly contributions (determined in relation to the
basic salary of the respective employees) to a fund administered by the Government of India.

     Gratuity is a defined benefit retirement plan covering all employees and provides for lump sum
payment to employees at retirement or termination (computed based on the respective employees last
drawn basic salary and years of employment with the Company). Liability for gratuity is accrued
based on an actuarial valuation on an overall Company basis.

     The Directors (who are not executive officers) are not entitled for any remuneration including
any pension, retirement or similar benefit schemes.

Sify Technologies Limited

March 16, 2009

Page 6 of 14

     In respect of remuneration paid to the executive officers, provident fund contributions made
by the Company have been included under the “Salary” column for the purpose of disclosure under
Item 6 of Form 20-F.

     The details of our contribution to provident fund in respect of the executive officers are set
forth below:

Name

    Rs in million

    C V S Suri

    0.33

    Bhaskar R Sayyaparaju

    0.28

    V Sivaramakrishnan

    0.26

    David Appasamy

    0.13

    Naresh Ajwani

    0.17

    Pijush Kanti Das

    0.17

    Venkat Rao Mallineni

    0.14

    K N Ajith

    0.11

    Vijay Kumar

    0.15

    P J Nath

    0.29

    Aravind Mathur

    0.27

    S Gopalakrishnan

    0.15

     Gratuity expense is determined at an overall Company level based on an actuarial valuation
performed by an independent actuary. Thus, the cost for the year ended March 31, 2008 in respect