Flag Tele in $100mn deal with European firm

Flag Telecom, a subsidiary of Reliance Communications, has signed a $100 million (around Rs 410 crore) gigabit ethernet connectivity deal with a leading European research firm to enable its scientists conduct live video discussions and monitor projects.

Gigabit ethernet comprises various technologies that transmit data at speeds of around 1,000 megabits per second (Mbps) compared with ethernet speeds of 100 Mbps.

The deal is expected to be announced next week, sources close to the development said. A high-level team of Flag Telecom is currently stationed at Switzerland, the headquarters of the European research firm (name could not be ascertained). A Reliance Communications' spokesperson declined to comment.

Flag Telecom will route the ethernet connectivity on its sub-sea cable system, providing the company with high-speed and hi-definition video and data links. This will provide flexible and redundant trans-ocean routing with over 100 per cent uptime to the research firm's global affiliates and associate research agencies. The traffic is expected to begin within a week of commencement of the deal.

The bandwidth provider is also setting up a dedicated channel for the research organisation on its Flag Europe Asia (FEA) and Falcon Cables that would be connected to the US and East Asia over Flag Atlantic cable. This would be then connected to the FEA Cable in Hong Kong and routed to India.

This is first contract for the Anil Ambani group company after it acquired Yipes Holdings for $300 million in July this year. The company also got the latter's customer base of 1,000 corporates, most of which are in the financial services and legal services business.

Reliance Communications was looking at listing Flag Telecom in the next six months.