Reliance ready to slash bandwidth prices

[niket 0]

Reliance Ready To Slash Bandwidth Prices By 70 percent

Source: The Hindu, March 08, 2004

New Delhi, Mar 8 (PTI) Reliance Infocomm today said it could reduce prices of international bandwidth by upto 70 per cent if the access to bottleneck facilities (landing station), currently with VSNL, was opened up for competition.

"We can bring the prices down to one million dollar per Synchronous Transport Module (STM) of 155 mbps international bandwidth from existing about five million dollar, provided bottleneck facilities are opened up at fair market prices," Manoj Modi, Executive Director, Reliance Infocomm said.

This would translate into reduction in prices of international bandwidth by about 70 per cent, Modi said adding it would help the entire IT-enabled services, especially the emerging Business Process Outsourcing (BPO) segment.

Reliance Infocomm, which acquired FLAG Cable System recently, has sufficient international bandwidth but was facing difficulties in getting it released from the incumbent Videsh Sanchar Nigam (VSNL) Ltd which has the exclusive right on the landing stations.

"Various operators are asking us for international bandwidth, but we are unable to provide as VSNL has not released even the 15 STMs," Modi said adding, by doing so India was missing many IT and BPO related business opportunities.

Reliance is hoping to set up its own landing stations but that would take another 10 months.

[Ashokjp 15]

Reliance May Slash Bandwidth Prices

Source: Techtree News, March 10, 2004

Reliance Infocomm announced that it might reduce prices of international bandwidth by up to 70 per cent if the access to bottleneck facilities (landing station), currently with Videsh Sanchar Nigam Ltd (VSNL), was opened up for competition at fair market prices.

The prices could be down to 1 million USD per synchronous transport module (STM) of 155 Mbps international bandwidth from the existing 5 million or so. This implies a reduction by around 70 percent and would be beneficial for the infotech- enabled services, esp. the BPO segment, the company states.

The company had acquired the FLAG cable system recently, but faced problems in getting their sufficient international bandwidth released from the VSNL which has the exclusive right on the landing stations.

According to the company, denying access to international bandwidth is a violation of ILD license terms and conditions. It feels that India is missing many business opportunities due to VSNL's stand on the issue. Reliance is hoping to set up its own landing stations by 10 months from now.

FLAG, which is building a high-capacity resilient loop cable system that will connect the Gulf region, India and China, had recently written a letter to Telecom Regulatory Authority of India (TRAI) on its ability to provide additional capacity of 17 STM1s from India (beyond 15 STM1s). If granted permission by VSNL, 23 STM1s could thus be availed by customers who need bandwidth from India.

Reliance Infocomm says that FLAG cable system's upgradation has been stalled currently at all the landing stations due to difficulties faced by FLAG in utilizing the bandwidth already installed.

It had earlier written to TRAI on the issue requesting access to landing station. The TRAI has held meetings with ILD service providers including Reliance and VSNL. However, reliable sources state that the talks are on but nothing concrete has emerged till now.

[niket 0]

FLAG comes under fire

Source: Rediff News, March 10, 2004

Videsh Sanchar Nigam Ltd has joined international carriers AT&T, Sprint and MCI WorldCom in blaming FLAG for reneging on its commitments in bandwidth allocation.

In separate letters to FLAG, the companies said the undersea cable network was selling additional capacity to Reliance Infocomm at their expense.

Reliance recently acquired FLAG for Rs 950 crore (Rs 9.50 billion). In its letter, MCI said it faced a "severe business risk" and FLAG seemed to have "used us to serve its own business purpose".

VSNL, in its letter, said, "Such manipulative actions by FLAG are jeopardising international traffic between India and MCI and abuse monopolistic position. This is highly unbecoming of an international telecom facility provider that claims to be a neutral carrier's carrier."

When contacted, Reliance sources said they were not aware of the new

developments.

VSNL pointed out that even in the case of AT&T, FLAG had failed to honour its agreement to provide 2 STM-1s (1 STM-1 offers 155 mbps bandwidth) between India and the UK.

"In the absence of the requested bandwidth capacity, AT&T and VSNL are not in a position to provide the much-desired diverse path between India and the United States to their respective infotech customers," the company said in its note.

Reliance Infocomm had earlier accused VSNL of not releasing adequate bandwidth on FLAG, which prevented the latter from offering competitive prices.

Reliance had also approached the Telecom Regulatory Authority of India alleging that VSNL had released only 4 STM-1s on FLAG, though it had an agreement with the cable company for 12 STM-1s.

VSNL had responded by saying it was not aware of such an agreement and was therefore not obliged to release bandwidth to Reliance.

Edited March 11, 2004 by Ashokjp