Bandwidth prices will slip

NEW DELHI: SEA-ME-WE-4, an undersea cable system linking India with the West, which is jointly owned and developed by 16 partners across the world including Bharti and Videsh Sanchar Nigam Ltd (VSNL), was commissioned on Tuesday. Bharti Tele-Ventures president (Infotel) Badri Agarwal made the announcement at a select media briefing in the capital.

Although pricing is a function of the market, the launch of the cable system may see bandwidth rates falling further, Agarwal said.

A source in VSNL also indicated that bandwidth prices would fall anything between 10% and 20% on the western routes with the commissioning of SEA-ME-WE-4, resulting in cost savings for India-based customers of international private leased line circuit (IPLC). On the eastern sector, bandwidth prices are not likely to be slashed any further, it is believed.

Since bandwidth is essential for any BPO company or a call centre, a reduction in bandwidth prices is expected to benefit outsourcing.

Recently, the Telecom Regulatory Authority of India (Trai) had issued an order directing reduction in bandwidth prices. On an average, prices have been falling by 50% a year.

Agarwal said, "the commissioning of SE-ME-WE-4 (South East Asia, Middle East and Western Europe 4) gives us further edge in servicing the demand for international bandwidth in India as it complements our already existing cable system-Network i2i."

While i2i, a Bharti-Singtel venture, is a Chennai to Singapore cable, SEA-ME-WE-4 will join India with Europe and the East Coast of the US, among other locations. With this, Bharti will be on a strong wicket in the data market, officials said.

The new cable system will connect 14 countries, with landing in India, Singapore, Malaysia, Thailand, Bangladesh, Sri Lanka, Pakistan, UAE, Saudi Arabia, Egypt, Tunisia, Italy, Algeria, France and Suez.

Bharti, with 8.05 per cent ownership of SEA-ME-WE-4, has invested over $40 million towards the estimated $500-million project.

The capacity offered by any operator is directly proportional to its ownership and investment in the cable system.

In addition to the consortium in SEA-ME-WE-4, Bharti plans to work with Indian and global telecom partners in the undersea cable business, officials indicated.
The company is in talks with several players for long-term relationships, it is understood.

Other partners in the consortium include VSNL, Singtel, Sri Lanka Telecom, Bangladesh Telegraph, Telephone Board, France Telecom, Pakistan Telecom, Telekom Malaysia, Saudi Telecom, Emirates Telecom, Telecom Egypt, CAT Telecom, MCI International, Telecom Italia, Tunisie Telecom, and Algerie Telecom.

The MoU for the project was signed last year. Bharti, VSNL and Singtel, have the highest share of 8.05 per cent each in the project.

According to Agarwal, Bharti has doubled its data capacity by adding another 160 GBPS of capacity through SEA-ME-WE-4, which supports Internet, multimedia, broadband and telephony applications. With the rising bandwidth demand of the country, the newly commissioned undersea cable system will come handy, according to officials.

Besides providing a boost to the penetration of broadband and Internet in the country, the cable system will benefit sectors like IT, ITES, banking and finance.

Bharti does not have any plans to install a cable to China, according to Agarwal. He was responding to a question on direct connectivity between India and China.

VSNL and Reliance Infocomm are the other two Indian players in the undersea cable business, besides Bharti. Bharat Sanchar Nigam Ltd (BSNL) has also announced plans to set up its own cable systems on various routes.

On the data side, Bharti customers include hundreds of big enterprises such as ICICI, HDFC, GE Caps, Convergys, American Express. The numbers are expected to double over the next two years or so, officials indicated.

With the commissioning of the new cable system, the company is targeting an annual sale of 10 GBPS to 20 GBPS capacity. In the past two years, it has sold around 10 GBPS of capacity.

A cut in west, none in east
Bandwidth prices would fall anything between 10% and 20% on the western routes
The rates are unlikely to change on the eastern routes