Alcatel Bags $350 Mn Deal From Rcom

[@ksh@T 20]

NEW DELHI: FLAG Telecom, the wholly-owned subsidiary of Reliance Communications, has awarded a contract estimated at $350 million to France-based vendor Alcatel to build a fully IP-enabled trans-Pacific undersea cable.

The cable is a part of the $1.5-billion expansion plan for FLAG Telecom unveiled by the company earlier last year. The expansion plan will see FLAG add 50,000 km of optics to its existing 65,000 km of undersea cable network across the globe, the company said. The expansion plan would primarily be funded by internal accruals, pre-sales, cash flows and external debt. The FLAG Network would cover 1,15,000 km by 2010, the company added.

“The construction contract of the trans-pacific cable with an approximate length of 11,000 km, crossing the world’s largest ocean is estimated to cost around $350 million. The trans-Pacific cable will link Japan and West Coast of US.

This cable will be seamlessly integrated with the other Cable assets of FLAG Telecom, including the existing FEA Cable (Europe, Indian Sub-continent, East Asia), FLAG Atlantic (East Coast US to Europe), FLAG North Asia Loop, FALCON (Egypt - Middle East- India) and the forthcoming cables connecting Mediterranean, Africa and East Asian countries,” company sources told ET.

When contaced, the RCOM spokesperson confirmed the development and in a written reply said: “Worldwide, the global market for enterprise and institutional data services is worth $90 billion (Rs 3,60,000 crore). With completion of this next generation network cable, FLAG will be the only service provider to reach over 60 countries on a private cable system”.

The trans-Pacific route is the second busiest route after the trans-Atlantic route for the undersea cable industry. However, considering the growing traffic between China, Hong Kong, Singapore, Japan and Indian sub-continent to the West Coast of US, the demand on this route is expected to grow faster than trans-Atlantic, sources added.

The contract also marks Alcatel’s second major contract with Reliance Communications. The French telecom infrastructure major had also built the $400 million Falcon under sea cable for RCOM. This cable was commissioned for commercial use in September 2006, and FLAG has already sold capacities worth $500 million in this network, the company said.