VSNL goes underwater to link Singapore

CIOL Bureau
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NEW DELHI: India’s biggest telecom service provider, Videsh Sanchar Nigam Ltd (VSNL), said that it plans to set up a submarine cable link between India and Singapore to tap the growing market for data services.

Bombay-based VSNL, a former state-run telecoms firm now owned by the Tata group, said the cable will have a capacity of 5.12 terabits and will be operational by the end of 2004.

The 3,100-km cable will originate from the southern city of Madras.

"VSNL will be able to enhance its bandwidth infrastructure... and capitalise on future growth in the corporate data market," Managing Director S.K. Gupta said in a statement.

The market for data services has leapt by between 70 to 80 percent each year over the past three years as a growing number of global firms have set up backoffice operations in India because of the low cost structure offered by the country.

The proposed cable will compete with a similar link offered by a unit of Bharti Tele-Ventures Ltd, India's largest cellular services provider which is 16 percent owned by Singapore Telecommunications Ltd.

Over the past two years VSNL, also listed on the New York Stock Exchange, has faced growing competition in the once high-margin international calls sector as newer players have slashed rates to win market share.