VSNL, 12 telecom carriers in cable linking JV
By Pradeep Rane | 09 Sep 2002
Mumbai: Videsh Sanchar Nigam Ltd (VSNL), India's premier provider of international telecommunications services and a leading Internet service provider, and 12 other international telecommunications carriers have signed a memorandum of understanding in Bali, Indonesia, to jointly work on the construction of a new submarine cable linking South East Asia, the Middle East and Western Europe.
The cable project will connect 12 countries: Indonesia, Singapore, Malaysia, Bangladesh, India, Sri Lanka, Pakistan, the United Arab Emirates, Saudi Arabia, Egypt, Italy and France.
The other partners in the cable project are PT Indosat, Singapore Telecommunications Ltd, Telekom Malaysia Berhad, Bangladesh Telegraph and Telephone Board. Bharti Enterprise Sri Lanka Telecom, Pakistan Telecommunication Company Ltd, Emirates Telecommunications Corporation, Saudi Telecom Telecom Egypt, Telecom Italia Spa and France Telecom.
It is currently under planning that this cable project will be built using the DWDM technology, with a proposed design capacity of 1.28 terabits per second. The network will provide the much-needed bandwidth as the existing cables along the same route become saturated. Currently, data traffic from South East Asia and the Middle East to Europe is routed via smaller capacity cables, mainly SEA ME WE 3 and Flag.
VSNL had posted a net profit of Rs 261.2 crore for the quarter ended 30 June 2002, down 29 per cent over Rs 365.5 crore reported in the quarter ended 30 June 2001. The total income fell 13 per cent to Rs 1,428.5 crore in the quarter ended 30 June 2002, from Rs 1,642.1 crore in the corresponding quarter of the previous year.
The company attributed the decline to “the internationally prevailing phenomenon of drop in settlement rates, coupled with the decline in ILD tariff, pressure on interconnect charges and lower other income.“ The settlement rates — the basis for distribution of income among telecom operators for international calls — have declined from 34 cents last year to 22 cents.
ILD tariff fell from Rs 48 per minute to Rs 40 per minute during the June quarter. The effect of the still steeper cuts by VSNL (to Rs 24 per minute), following Bharti's announcement will only be felt in the next quarter. The company said it had witnessed an increase of approximately 24 per cent in traffic volume during the quarter over the corresponding period of the previous year.