(The Times of India via NewsEdge) Tata group's 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 link will ensure availability of telecom and Internet bandwidth, demand for which is growing at an exponential pace.
The over 10,000km cable, connecting Mumbai with France, will cost the consortium of five players including VSNL between $350 million and $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 18 months, giving it 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 a pace of 70% in the next five years. Bandwidth demand in West Asia is also growing at 70% to 80% and there is a spurt in demand from North Africa on the back of substantial growth in mobile telephony.
"The expansion is to ensure that we are ready with new capacity when the additional demand comes in," a VSNL executive has said.
Industry specialists say that despite adequate capacity available in India, new bandwidth is necessary as enterprise customers such as telecom and Internet-based businesses buy up more than one 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 multiple backup requirements of customers.
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