NEW DELHI: The communication boom in Asia is triggering a fresh round of submarine cable frenzy across the continent and this time around, all major Indian players—Bharti Airtel, Reliance Communications, Tata Communications and BSNL—are riding the boom.
Indian submarine players are stakeholders in almost all key cable projects announced in Asia recently, while in the case of Tata Communications and Reliance’s Flag, they are building the undersea links single-handedly. In total, they will invest over $4 billion over the next two years to build new undersea links. The logic: a significant chunk of the next trillion dollars in global communications space will come from Asian telcos whose bandwidth requirements are growing by the day.
For Indian corporates, the move by service providers to build multiple cable systems implies that they can adapt high bandwidth applications in the coming years without incurring huge additional expenses. The surge in cable capacity will also enable the Indian outsourcing industry to lease capacity on multiple cables without investing large amounts of money, thus safeguarding themselves from service disruptions.
The larger implication of the cable boom is that Indian consumers will have better broadband speeds and provide telcos requisite bandwidth to offer triple-play services including IPTV and HDTV. For Indian IT companies, larger bandwidth will help create and host content at home. Put simply, large number of companies will look to place their servers in India.
Analysts also believe that an important factor that is aiding Indian submarine cable players to go for route diversity is the industry’s demands for better network reliability. Indian and Asian corporates are seeking better protection especially in the wake of the recent cable cuts in Flag and SEA-ME-WE cables. “The impact of the recent outage was heavy on most small outsourcing firms and they are now contemplating building in redundancy to avoid a similar situation. With increased capacity, more such firms will be able to afford redundancy,” explained Integreon Global Knowledge Services senior vice-president, Lokendra Tomar.
“We cannot put all eggs into a single basket,” Bharti Airtel’s President for enterprise services David Nishball recently told ET when announcing that the company had joined hands with five international companies including internet giant Google to construct the ‘Unity’ sub-sea cable system linking the US and Japan.
Bharti was forced to reroute its traffic through its i2i cable when the SEA-ME-WE damaged earlier this year. Bharti has also joined two other consortiums — the 20,000 km-long Asia-America Gateway project and the I-Me-We system that will connect India to France via the Middle East. “Consortiums are the way to go forward. In a growing economy, we see increased demand from corporate and enterprise customers and we are therefore open to joining new consortiums to meet the bandwidth demands on all key routes. I see the need for another cable between Asia and Europe via India,” Mr Nishball had added.
Tata Communications is part of both the TGN Intra Asia and TGN Eurasia undersea cable consortiums. The 6,500 km Intra Asia will cover Hong Kong, Japan, Singapore, Philippines and Vietnam while TGN Eurasia cable system will link Mumbai directly to Paris, London and Madrid via Egypt. Tata Communication executives say that this was part of the company’s plan to invest $2 billion for additional submarine cable systems connecting emerging markets in Asia, Middle East and Africa to Europe to meet the demands of consumer broadband and enterprise customers over the next 5-8 years.’
The most ambitious of these projects is FLAG NGN being built by RCom — The $1.5-billion undersea cable will cover 50,000 km and span 60 countries across continents. Millenium Telecom, a JV between state-owned PSUs, BSNL and MTNL will soon award contracts for both the West Asia and Singapore undersea links.
Analysts also say that the bandwidth boom spells good news for those Indian telecom operators who have not invested in the undersea link businesses. This is because, the increased capacity in addition to keeping bandwidth prices down will also ensure that the prices are competitive.
Source : EconomicTimes
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