India allows US firm to sell bandwidth directly

NEW DELHI: US-based telecom firm FLAG Telecom can directly sell bandwidth to

Indian Internet service providers (ISPs) following the resolution of a dispute

with India's Videsh Sanchar Nigam Ltd. (VSNL), India's telecoms minister said on

Wednesday.

"The outstanding dispute between VSNL and FLAG Telecom has been

resolved," minister Pramod Mahajan told a news conference. "FLAG can

sell its bandwidth directly to ISPs with immediate effect."

Mahajan also said that from April 1, FLAG will be able to sell its capacity

directly to international long distance operators as well.

"Access and interconnect charges will be agreed between VSNL and FLAG on

a fair and reasonable basis," he said. This decision will almost double the

bandwidth availability in India, he said. Mahajan also said VSNL had decided to

reduce the annual rental of international bandwidth by 35-40 per cent.

"This will result in greater usage of bandwidth by Indian industry and

provide a further boost to India's IT sector," he said. The rate reduction

will be subject to approval by the Telecoms Regulatory Authority of India, he

said.