Flag, VSNL agree on bandwidth

[niket 0]

Trai May Play Peace-broker In Row Between VSNL & Reliance.

Source: Financial Express, March 11, 2004

NEW DELHI: Months after Reliance Infocomm and Videsh Sanchar Nigam Ltd (VSNL) had a slanging match over the international bandwidth sharing issue, Telecom Regulatory Authority of India (Trai) might have to intervene since the two corporates haven’t been able to settle the matter among themselves.

When contacted, Trai member Dr DPS Seth said, “We are looking at full utilisation of all the cable capacities that land in the country.”

When asked if the terms of the contractual agreement between VSNL and FLAG would be broken in case VSNL is asked to provide access, Dr Seth said, “Notwithstanding any contract, it is logical that all available bandwidth should be utilised. There should not be any bottlenecks at any point.”

He however, added, “We would like if the operators settle the issue between themselves.”

It may be recalled that Reliance Info had earlier written to the Trai on the issue requesting access to VSNL landing station. Following this, VSNL had also written to Trai in order to put forth its point of view, citing its contract with FLAG.

Over the past few months, Trai has met ILD (international long distance) service providers including Reliance and VSNL as well as Nasscom officials, but it is yet to decide on the issue.

The issue heated up again recently following Reliance’s claims that it would bring down international bandwidth prices by about 70 per cent if it could access the landing stations.

Edited March 11, 2004 by Ashokjp

[niket 0]

VSNL Ready For Talks On FLAG Telecom Issue.

Source: Financial Express, March 11, 2004

Tata-owned Videsh Sanchar Nigam Ltd (VSNL) has stated that it is willing to negotiate the controversial FLAG Telecom issue on terms and conditions that are mutually acceptable. This comes after the two parties have agreed to discuss the issue of bandwidth in an attempt to resolve it.

FLAG Telecom was acquired by Reliance Infocomm earlier this year giving Reliance access to huge cable systems and significant access to the international long distance (ILD) business. VSNL, however, holds exclusive rights to the landing station of FLAG and the entire debate has revolved around getting the required bandwidth released. Since VSNL holds the exclusive rights, it is in a position to determine how much of bandwidth should be released. Reliance Infocomm is said to have a huge requirement of 15 STM1s (this translates into 155 mbps of data) for its international long distance service and has charged VSNL with not making available adequate bandwidth. The bandwidth will be also useful for a host of IT and IT-enabled Services (ITES); businesses such as that of BPO would come under this.

VSNL officials say that the usual level of capacity required will be given, while additional capacity will be made available through negotiations.

Meanwhile, Reliance Infocomm has said that bandwidth prices can be reduced to $1 million per STM from the current level of $5 million per STM. In fact, Reliance has said that VSNL has been creating a scarcity of bandwidth.

FLAG Telecom officials, meanwhile, have shot off a letter to VSNL stating that it has not allowed FLAG access to providing bandwidth. While meetings have taken place between the two parties, there is no clear indication when the issue will be resolved.

Interestingly, the Telecom Regulatory Authority of India (Trai) has said that it will intervene if the issue is not resolved largely because the lack of supply of bandwidth could affect businesses that would require it.

[hovs 0]

And TRAI with all the authority vested in it cannot resolve.

[niket 0]

Indian telecoms row keeps international access prices high.

Source: Reuters News, March 12, 2004

BOMBAY (Reuters) - India's two biggest business groups are locked in a bitter tussle over international telecoms access that analysts said on Friday was preventing prices in the country, among the highest in the world, from falling.

The disagreement has prompted the telecoms regulator to sit down with all India's international operators in an effort to hammer out an agreement on pricing. Failing that, the regulator said it would be forced to make the final decision.

Reliance Infocomm, a telecoms operator owned by India's largest group, Reliance, has accused former international telecoms monopoly Videsh Sanchar Nigam Ltd (VSNL) of reneging on an agreement to release undersea cable capacity.

"VSNL has not released (the capacity) as per agreement," said Reliance Infocomm Executive Director Manoj Modi. "Various operators are asking us for international bandwidth, but we are unable to provide it."

VSNL, part of the rival Tata group, India's second-largest conglomerate, has rights to receive traffic from an undersea cable belonging to FLAG Telecom under a deal that predates Reliance's acquisition of FLAG in January.

A senior official at VSNL, a state-run company that had a monopoly on international services until early 2002, rejected Reliance's assertion that it had not honoured its agreement.

"The subject of differences between VSNL and FLAG Telecom is purely a commercial issue," said VSNL Managing Director S K Gupta. "VSNL and FLAG are engaged in a dialogue and we cannot comment further."

In a letter sent to FLAG last week, VSNL said it was willing to negotiate on how much capacity to release and the terms for doing so.

"We look forward to a proposal from FLAG," wrote K P Tiwari, vice president of operations.

Industry officials saw the entire dispute as merely a game of one-upmanship. On the one hand, bandwidth prices needed to fall significantly and India clearly needed more telecoms capacity.

But on the other, they said it was in the industry's interests to prevent a sudden glut and a resulting drop in prices that would drive operators without deep pockets out of business.

HIGH PRICES

International bandwidth prices in India are double those in China and four times those in the Philippines, analysts estimate.

"Prices are so high because these two companies cannot come on to a common platform to decide on the terms and conditions," said Anant Katare, telecoms analyst at Khandwala Securities.

"Sooner or later international bandwidth prices will have to fall by adjusting to the demand and supply situation in the marketplace."

India's telecom regulator has met with all the international service providers to help them reach a consensus on the pricing and terms under which VSNL will make bandwidth available, Telecom Regulatory Authority of India (TRAI) Chairman Pradip Baijal said.

"If they don't reach a consensus within the next two to three days, we will be forced to issue a binding regulation," he said.

The conditions of international long-distance licences awarded by the regulator two years ago stipulate that no operator could create a "bottleneck" in the bandwidth allocation.

"Where there is spare capacity, you cannot sit on it," said TRAI's D P S Seth, who is mediating in the Reliance-VSNL row. "Our interest is to see that bandwidth is available to our IT industry."

[niket 0]

VSNL assigns four stm-1s to Reliance Infocomm..

Source: Business Standard, March 16, 2004

Internet gateway and service provider Videsh Sanchar Nigam (VSNL) has assigned four stm-1 circuits, a 155 mbps connectivity mode, on Flag submarine cable network to Reliance Infocomm, of the total 15 sought by the latter.

"We had sought a total of 15 stm1s and VSNL has agreed to activate four stm1s on Flag cable network", Reliance Infocomm spokesperson Amit Khanna said today.

The stm1s are expected to be activated today, Khanna added.

Meanwhile, VSNL sources said the company was ready to assign more capacity to Reliance Infocomm, provided rightful customers are not deprived of bandwidth.

The Tata group company is in control of the cable landing stations in India and is in a position to determine how much bandwidth should be released to the sub-continent.

Reliance Infocomm had earlier alleged that VSNL was not releasing bandwidth over Flag and had blamed the Tata company for scarcity of bandwidth in the country.

VSNL had stated that Reliance Infocomm had over sold capacity than the assigned capacity, which was creating a dearth in the sub-continent.

Both VSNL and Reliance Infocomm had earlier written to Telecom Regulatory Authority of India (Trai) on the issue and the regulator said it would intervene if the companies do not settle the issue among themselves.(PTI)

Edited March 16, 2004 by Ashokjp

[Arun 795]

Vsnl Offers 40% Discount To Flag

Business Standard - March 23, 2004

Videsh Sanchar Nigam Ltd softened its stance and offered a 40 per cent discount to undersea cable system FLAG Telecom on access and facilitation charges for using the landing station in India. The offer, made today, also makes room for the allocation of more capacity to the Reliance-owned FLAG Telecom.

VSNL had earlier released around 4 STM1s to Reliance Infocomm after the telecom regulator asked the company to resolve all bottlenecks that were creating artificial drought in international bandwidth availability ( An STM1 is equal to around 155 mbps capacity).

According to VSNL sources, the Tata-managed company has offered to part with a chunk of the commission it gets from FLAG for allowing access to the landing station.

“We get about 10 per cent of the revenue share as access and facilitation charges. Of this, we have offered a 40 per cent discount. We have also made an offer of freeing bandwidth capacity, in addition to the 15 STM1s that have already been allocated to FLAG.”

VSNL sources said they were willing to sign a fresh agreement with FLAG for allocating more bandwidh. FLAG, recently acquired by Reliance Infocomm, had earlier written to VSNL that the long distance operator was not releasing bandwidth despite having it.

If FLAG agrees on the new offer, it will resolve the four-year-old battle between the two companies. Complaints were also made by Indian telecom and IT companies that there wasn’t enough bandwidth because of which the price on international capacity was on the higher side.

Industry associations like National Association for Software and Services Companies (Nasscom) had also accused VSNL of taking advantage of the monopoly situation.

VSNL had earlier said it was acting as per the market situation and was under no obligation to make additional capacity available.

[Greens 21]

so VSNL performs better under TATA management.

[Chirag 5]

Flag, VSNL agree on bandwidth

International long-distance tariffs to fall

Business Standard

Published : March 25, 2004

With Videsh Sanchar Nigam Ltd (VSNL) and undersea cable network Flag Telecom resolving their long-standing dispute over landing rights, international long-distance tariffs are set to fall.

The two sides signed an agreement, in the presence of the telecom regulator, which envisages VSNL releasing 1,000 megabits of bandwidth capacity to Reliance-owned Flag.

The deal

--------------------------------------------------------------------------------

VSNL will release 17 STM1s to Flag

VSNL will also allow Flag access to its landing stations in India

VSNL will get 5 STM1s on Flag’s network

The agreement was reached after a six-hour-long meeting between the two sides, which was mediated by Trai

VSNL will lose its monopoly over the international bandwidth market

VSNL will also allow access to its landing stations in India. VSNL will release the bandwidth by the middle of April.

This means that Flag Telecom will be able to offer bandwidth to its subscribers even as the Tata-controlled VSNL loses its monopoly over the international bandwidth market.

Availability of bandwidth from sources other than VSNL, in turn, will result in a steep cut in international long-distance tariffs in the next few weeks. Reliance had earlier said it might slash prices by up to 70 per cent once capacity was made available.

The agreement came after a six-hour-long meeting between the two sides mediated by the Telecom Regulatory Authority of India (Trai).

“The dispute between VSNL and Flag has been settled, with VSNL agreeing to release 17 STM1s to the latter. This will allow Flag to freely offer bandwidth to its subscribers. In turn, VSNL will get 5 STM1s on Flag’s network,” DP Seth, member, Trai, said after the meeting. Seth said the commercial terms would be decided by the two operators.

The Tata-managed company had earlier refused to grant Flag access to its landing stations on the grounds that enough capacity was not available.

The controversy had picked up steam after Reliance Infocomm acquired Flag recently. VSNL’s refusal to release capacity was putting a roadblock in Reliance’s international long-distance telephony plans.

A large number of infotech-enabled service companies and the National Association of Software and Service Companies (Nasscom) had earlier written to the telecom regulator complaining that VSNL was creating an artificial shortage of international bandwidth in order to keep prices inflated.

VSNL, on the other hand, had maintained that it was under no obligation to release more capacity as it was not part of an earlier agreement it had signed with Flag.

[city02 63]

http://economictimes.indiatimes.com/articleshow/766186.cms

MUMBAI: Reaching an amicable solution over the issue of access, Reliance group entity FLAG Telecom and Tata group-managed VSNL on Monday announced that an agreement has been reached for sale of 17 STM-1s on the FLAG Europe Asia cable system into or from India.

Under the terms of this agreement, which was reached on May four, 2004, six STM-1s Westward and 11 STM-1s Eastward would become available immediately to the marketplace, the two companies said in a statement here on Monday.

An additional bandwith capacity of about 2.65 Gbits/s would also become available for sale to or from India, they said.

With the signing of this agreement, FLAG Telecom and VSNL have settled their differences amicably to the extent of the issue of access for existing capacity available under the C&MA for sale on the FEA cable system.

Additionally, VSNL has reduced its landing station access charges per STM-1 by 25 per cent and FLAG has agreed to the allocation of five STM-1s to VSNL at non-discriminatory price.