India europe cable venture


Videsh Sanchar Nigam Ltd., (VSNL) is leading the India-Europe submarine Cable Venture. Tata group seems to be on a roll. Its long-distance telephony and internet services firm Videsh Sanchar Nigam (VSNL) has forged an alliance to construct a high capacity submarine cable linking India, West Asia and Western Europe. Expected to be commissioned in mid-2008, the undersea cable link will ensure availability of telecom and internet bandwidth, demand for which is growing at an exponential pace.

The over 10,000 km cable, connecting Mumbai with France, will cost the consortium of five players including VSNL to the tune of $350-400 million. A company source says VSNL will be the biggest shareholder in the network with an investment of up to $150 million over the next eighteen months. This will give the company managerial and operational control. Etisalat, Saudi Telecom, Telecom Egypt and Telecom Italia Sparkle and VSNL have signed a memorandum for the construction of the network.

The move comes at a time when bandwidth requirement in India is expected to grow at 70% for the next five years. Bandwidth demand in West Asia is also growing at 70-80% annually and there is a big spurt in demand from North Africa on the back of substantial growth in mobile telephony. According to VSNL the expansion is to ensure that they are ready with new capacity when the additional demand comes in.

Industry specialists say despite adequate capacity available in the country, new bandwidth is necessary as enterprise customers like telecom, software companies and internet based businesses buy up more than one global link to build redundancies in the system. Globally, it is a norm to have bandwidth capacities of 2.5-3 times the actual demand because of the multiple backup requirements of enterprise customers.

There is also belief that the increasing foreign direct investment in and out of the country will also bring in new demand for bandwidth from companies. For example, it is expected that Tata Steel which recently announced acquisition of UK-based Corus will buy international bandwidth to set up communication links between India, UK, and the Netherlands.

The cable system that will connect India, UAE, Saudi Arabia, Egypt, Italy and France is expected to be ready by mid-2008 and the construction contracts will be awarded in the next two months. The cable will have proposed design capacity of at least 2.56 terabits per second.

To sum up it’s a wired world project which will connect India, UAE, Saudi Arabia, Egypt, Italy and France. The telecom service providers plan to award construction contracts by end-2006 so as to enable the project to be ready for service by mid-2008. Flag telecom, the wholly-owned subsidiary of Reliance Communications, has commenced work on its Falcon under-sea cable system.