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Monday, May 13, 2002

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Estel — The ILD dark horse

G. Rambabu


GUESS who could be the strongest competition to Videsh Sanchar Nigam Ltd (VSNL) in providing international long distance services?

While the "big guns" Bharti and Reliance are certainly in the reckoning, it is the little known Estel group which could well be the dark horse in the race.

The group's joint venture with the US-based Fusion Telecom — Estel Communications Pvt. Ltd is quietly working around to launching its ILD services in the next couple of months without making much of noise. It would be applying for a licence to the Department of Telecommunications (DoT) later in the month, followed by commercial launch in July.

What makes the company confident is the fact that it is a well-known telecommunications infrastructure player and is the largest provider of Internet backbone services in the country, besides VSNL.

According to the Managing Director, Mr Raj Hajela, almost 40 per cent of the existing ISPs are connected to the company which owns and operates an end-to-end network connecting Delhi, Bangalore, Hyderabad and Mumbai to Western Europe and North America.

"Not many would have heard of the company because we are essentially a wholesaler and don't cater to the retail segment. We are already providing carrier's carrier services for the past couple of years and interconnection with global data and voice carriers, giving us the ability to provide data services to over 155 plus locations and voice services to every country and city in the world," he said. Mr Hajela said venturing into the ILD space was just a question of time. The infrastructure was already operational and even the carrier agreements were in place. Only the interconnect agreements with BSNL and MTNL had to be signed, he said.

"While other private operators including Bharti and Reliance will have to spend a huge amount of money in setting up the infrastructure and carrier agreements, we have an advantage there. We already have a node in New York and our partnership with Fusion Telecom allows to utilise its carrier arrangements," he said.

Fusion Telecom is an ILD operator in the US, and has carrier arrangements with operators around the world. Until now, Estel was utilising it to provide connectivity to ISPs. Once the ILD licence is in hand, it can start utilising them for voice and data transmission as well.

The first step in this direction has already been taken. The Internet telephony services of the company have been launched. The services are currently being sold "wholesale" to ISPs, who have the choice of retaining the brand name "Net VOIZE", or having their own brand name for the services.

The ILD services will also follow this strategy of selling "wholesale". In other words, other ILD operators could buy its services and offer it as their own, he said.

Given this unique business model, Mr Hajela said the ILD operations, even while competing with the likes of Bharti, Reliance and Data Access, would also enable these companies to utilise its services. Certainly a win-win situation as far as Estel is concerned.

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