The Hindu Business Line : VSNL cuts bandwidth prices

BROAD TALK: Mr Kishor A. Chaukar, Member of Board & MD, Tata Industries, and Dr Mukund Rajan, Member of Board & Senior Vice-President, Tata Sons, at a press meet in Mumbai on Thursday. — Shashi Ashiwal

Mumbai , Aug. 24

Videsh Sanchar Nigam Ltd (VSNL) on Thursday announced up to 40 per cent cut in prices for its international bandwidth services.

In a move that will benefit BPOs and call centres, the Tata Group company has reduced the prices of international private leased circuits (IPLC) up to 25 per cent and Internet leased lines (ILL) up to 40 per cent with effect from September 1.

The company has also announced its plans to invest $600 million jointly with other leading global carriers to build two submarine cable systems linking India with Europe, the US and other Asian countries.

"The price reduction is part of the Tata Group's initiative to support and encourage India Inc's growth. This tariff cut in international bandwidth will help various BPO companies and call centre operations. The cut will also help us to increase our market share by bringing in larger volumes of business," said Mr N. Srinath, Executive Director, VSNL.

The telecom major plans to lay two submarine cable systems — one between India and Europe, and the other linking Singapore, Hong Kong and Japan (referred to as Intra-Asia by the company).

These multi-terabit capacity systems would interconnect with VSNL's existing global network that has over 20 terabits of capacity. According to company officials, the India-Europe cable will provide connectivity to the Gulf region and the African continent. This link will also supplement VSNL's existing bandwidth capacity in several consortium cables in the region.

The Intra-Asia cable will enhance the link between VSNL's Tata Indicom Cable (that links Chennai to Singapore) and the TGN Pacific Cable (linking Japan and the US).

The India-Europe link would be completed by mid-2008 and the Intra Asia linking would be done by the third quarter of 2007.

"The India-Europe link will be completed at an estimated project cost of $350 million and the remaining would be spent on laying the Intra-Asia submarine cable. The investment will be funded through strategic partnership with leading carriers, internal accruals and external borrowings. We have already begun negotiations with several European and American carriers in this regard," said Mr Srinath.

Group to invest more

Mr Kishor Chaukar, a VSNL director, said that the Tata Group is planning to invest about Rs 1.2 lakh crore in various sectors and businesses, in the next three to four years.

"The focus of the group will be wider than what it has been in the past. Sectors such as steel, automobile, life-sciences and telecommunication will be given special thrust."

Shares of VSNL rose by 0.41 per cent to close at Rs 416.10 on the BSE on Thursday.

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