VSNL reduces Bandwith prices by upto 40%, Announces Two New Submarine Cable Systems

Videsh Sanchar Nigam Ltd (VSNL) has announced a significant reduction in prices for its international bandwidth products - International Private Leased Circuits (IPLC) and Internet Leased Lines (ILL).

The global telecom major has reduced its IPLC prices in India by upto 25%, effective September 01, 2006. It has also announced a reduction of its ILL tariffs by upto 40%. These products are offered in India using the Company´s global network that spans over 200,000 route kilometres, with 275 PoPs, connecting 200 countries.

The price reduction is part of the Tata Group´s initiative to support and encourage the globalization of India Inc. Demand for international connectivity has been rapidly growing with several Indian Companies, led by Tata Group enterprises, investing overseas and India emerging as a favourite destination for FDI and FII inflows. International connectivity is also an important driver for the growth of the fast growing IT, BPO and KPO sectors. The market for international and Internet bandwidth is expected to expand as the reduced prices will encourage demand from new customer segments like SMEs, smaller ISPs and academic institutions.

The Company also announced its intention, in partnership with leading carriers in the respective regions, to build two new submarine cable systems, one between India and Europe and the other intra-Asia. These multi-terabit capacity systems, incorporating state of the art technologies, would interconnect with the Company´s existing global network that has over 20 terabits of capacity. The India - Europe cable would also provide connectivity to the Gulf region and the African continent, and supplement the Company´s existing bandwidth capacity in several consortium cables in the region. The intra-Asia cable between Singapore, Hong Kong and Japan would enhance the link between the Company´s Tata Indicom Cable (Chennai - Singapore) and TGN Pacific (Japan - USA). The overall build cost of these two cable systems is expected to be in the region of $600 million.

"VSNL has always taken the lead in growing the Internet and international bandwidth market in India. We have invested over Rs 2500 crores in expanding our global presence and connectivity in the last 2 years. We have regularly passed on the benefits of improved cost efficiencies and service quality to our customers," said Mr. N Srinath, Executive Director, of the Company. "The new cables would enhance VSNL´s global network in two of the fastest growing regions in the world," he added.

IPLCs are point to point, international private circuits, mainly used by large Indian corporates and multinationals to connect to their regional and global locations. Internet Leased Lines are dedicated high speed connections to access the Internet, used by enterprises and small / medium ISPs.

The Company has emerged as the one of the world´s largest owners of undersea cable bandwidth, after the acquisition of Tyco Global Network (TGN) last year. The Company is also now the world´s largest international wholesale voice carrier (with about 17 billion minutes of traffic annually) post the acquisition of Teleglobe in February 2006. A recent study by Boston Consulting Group (BCG) has identified the Company as an emerging global challenger, one of the top 100 Companies from rapidly developing economies that are going global and changing the world.

Source : Equity Bulls

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