VSNL share of cable landing stations to slip

The Tata group-controlled Videsh Sanchar Nigam Ltd's (VSNL) share of cable landing stations in India will be reduced to under 50 per cent by 2006. The drop in share is due to the retirement of its existing cables and lighting up of new cables by Indian telecom companies.

VSNL in its reply to the consultancy paper on International Private Leasedline Circuit (IPLC) in the country, said: "By the end of this year or soon thereafter, there would be over 13 landing stations, owned by four different International Long Distance Operators (ILDOs)".

This contradicts allegations by Reliance Infocomm and Comptel/Ascent, a US-based association for preventing restrictive practices in the telecom sector, that VSNL has a monopoly in International Private Leasedline Circuit (IPLC) and adopts restrictive practices in the country.

A cable landing station is the location where a submarine cable physically lands in the country. The sub-sea cables are the bandwidth providers to the country, an essential commodity for IT and ITeS companies.

At present there are around 7 submarine cables having landing stations in India, including Sea-Me-We-2 (SMW-2), SMW-3, SAFE, FLAG and i2i, with certain cables having two landing stations.

The other undersea cables are Tata Indicom Cable (TIC) and Indo-Gulf, having landing stations in the country.

VSNL owns and controls seven cable landing stations, while that of Bharti is two. Even though, other players do not operate landing stations, Reliance is slated to get one and Bharti two, after the setting up new cables.

This has increased competition, resulting in a reduction of the incumbent's (VSNL) total share of landing stations in the country.

Moreover, upcoming cables like Falcon (to be set up by Reliance Infocomm), SMW-4 (a consoritum cable with landing stations to be set up by VSNL and Bharti Tele-Ventures) and Sri Lanka Cable and Singapore Cable (to be set up by Bharat Sanchar Nigam Ltd) would also make a dent in the company's share of cable landing stations.

Also the impending retirement of India-Gulf and SMW-2 cables by early 2006 would also result in VSNL losing its share of cable landing stations. A cable's lifespan is around 15 years and that of both India-Gulf and SMW-2 has expired.

Earlier in December 2004, Comptel/Ascent had written a letter to TRAI stating that VSNL was restricting bandwidth capacity as the Tata group-controlled company has monopoly in the region. The association had also stated that this was against World Trade Organisation (WTO) norms under General Agreement

In its recent reply on IPLC consultancy paper, Reliance Infocomm also had alleged that VSNL was not providing access over the landing stations and was resorting to monopolistic activities.