Thomas K. Thomas

New Delhi , July 28

THE balance of power in the ownership of global undersea cable networks is decidedly shifting towards India. With over six major undersea cable network now owned by Indian telecom players, VSNL, Reliance Infocomm, Bharti Tele-Ventures and BSNL are slated to become the new bandwidth barons taking over from American companies such as AT&T, MCI and Sprint.

"There has been a glut in international bandwidth, which has resulted in many American companies going bankrupt," said a VSNL executive.

"In fact, studies show that only 14 per cent of the available bandwidth was being used, which forced many of these companies to sell out the infrastructure. Banking on the exponential growth in telecom services and a big demand from BPO units, Indian companies are picking up controlling stake in international bandwidth companies."

It all began with Reliance Infocomm acquiring 100 per cent equity in FLAG Telecom for $207 million (about Rs 1,000 crore) with a view to garnering market share in the global infrastructure segment. FLAG had a market capital of $7 billion at its peak and has laid submarine cables of around 50,000 km across the globe and has hubs in West Asia and the US.

Late last year, another multi-billion-dollar fibre network, Tyco Communications Network, was sold to VSNL.

The Tyco trans-Pacific cable is currently built to 460 gbps, just over one-third of available capacity from the US to Asia and Australia.

At maximum capacity, Tyco can support 5.12 terabits, twice the combined maximum capacity of the six other major cables on that route.

VSNL also has Singapore's first fully Indian-owned, undersea fibre-optic cable - Tata Indicom Cable.

In India the 3,175-km cable lands in Chennai and in Singapore it lands in Changi.

Construction of the 5.12 tbps cable began in November 2003; the cable went live on September 15, 2004 making it one of the fastest cable build-outs in history.

The recent acquisition of Teleglobe by VSNL for $239 million only adds to the story.

Headquartered in Hamilton, Bermuda with a large operating centre in Montreal, Teleglobe has more than 1,400 wholesale customers and carries over 13 billion minutes of voice traffic globally.

Then there is the Bharti-Singtel i2i cable between Chennai and Singapore as well as the Se-Me-We 4 cable system.

Similarly, BSNL is looking to set up an undersea cable system over the next year or so.

"The rise of the BPO sector, proliferation of MNCs, and growth of the domestic economy spells promising times ahead for the international bandwidth market for India, set to grow at a very healthy CAGR of 43 per cent over the next five years," said senior telecom analysts.

However, the analysts also warned that though the Indian market is the second fastest growing telecom market, there is still a glut in international bandwidth.

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