SingTel, Bharti in cable project

SINGAPORE: Singapore Telecommunications Ltd. (SingTel) on Tuesday announced a

joint venture with India's Bharti Enterprises to invest $650 million in an

undersea cable project.

The two companies said in a statement that the 50:50 joint venture would

build and operate India's first private sector undersea fiber optic cable

network, which would link Singapore with Chennai in southern India and Mumbai on

the West.

A consortium consisting of France's Alcatel Submarine Networks and Japan's

Fujitsu Ltd., has been selected to design, manufacture, install and commission

the Singapore-Chennai cable, it said.

The value of the supply contract is nearly $250 million and the cable is

expected to start carrying commercial traffic by the end of next year.

The announcement comes two months after SingTel said it would invest $400

million for stakes in two Bharti group companies.

SingTel, with an estimated cash pile of S $6.0 billion bought 20 per cent and

15 per cent stakes, respectively, in Bharti Telecom and Bharti Televentures

(both controlled by the holding group, Bharti Enterprises) to gain a foothold in

India's fast liberalizing telecom sector.

Largest cable capacity



The cable network would be the world's largest in terms of capacity with a total
bandwidth of 8.4 terabits per second and carry more than 100 million

conversations simultaneously.

The undersea cable venture would also sublet bandwidth to other Indian

operators, with the opening up of the domestic long distance (DLD) and other

international long distance (ILD) telecom sectors in India.

"This venture further reinforces our promise to the Bharti Group, of

helping it roll out the latest telecommunications services in India," said

SingTel president and chief executive Lee Hsien Yang.

He added this would be the first of many ventures SingTel hoped to work on in

India with Bharti, to offer a series of top info-communications services in the

country.

Bharti Enterprises chairman and group managing director Sunil Bharti Mittal

said the formation of the venture underscored its commitment to build telecom

and IT infrastructure in India.

"The bandwidth will benefit the software industry, call centers, dotcom

companies and Internet-Protocol-based industries for applications such as Web

hosting.

Analysts said the investment would be a win-win situation for both companies

and logical for SingTel.

Tjandra Kartika, regional telecom analyst with broker GK Goh, said:

"It's a big investment. India is one of the big markets in the region.

Given (it's) low penetration rate compared with other markets in the

region....given the liberalization and the size of the overall market in India,

it is a good investment."

He added it was a good place to start investing as India was better than

China in terms of regulations.

By midday on Tuesday, SingTel shares were up four cents at S $2.78 on almost

three million shares traded.

(C) Reuters Limited 2000.