3 Japanese firms in race for $1.5bn Flag deal

Three Japanese submarine cable construction companies have been short-listed by Flag Telecom, a wholly-owned subsidiary of Reliance Communications, for building its $1.5 billion (Rs 7,000 crore) next generation network (NGN).

The Anil Ambani group company is slated to announce the winner by the end of this week.

Futizsu Submarine Networks, NEC and KDD-SCS are the companies leading the race to build the sub-sea cable that will connect 5 billion people across 60 countries in the next three years.

The cable would become operational by December 2009, sources close to the development told Business Standard.

Global submarine cable construction majors Corning/Nord Deutche, Ericsson, Alcatel-Lucent and Nokia were also in the fray. The project was announced in December 2006, but name of the vendors the company was in discussion with were not disclosed.

A top-level management team of Reliance Communications is finalising the details of the contract, the sources said.

A Reliance Communications spokesperson declined to comment on the development.

In December 2006, Rcom Chairman Anil Ambani announced the setting up of the Internet Protocol-enabled submarine cable system, which he claimed would "democratise digital access."

It was slated to be 1,15,000 km long and was to be undertaken by Flag Telecom that would connect Asia (India, Malaysia, Singapore, Indonesia, Vietnam, Philippines and Brunei), Africa, Mediterranean and the Trans-Pacific.

NGN would enable 2.5 billion simultaneous mobile calls across the globe and 300 million instant messaging (IMs) and 52 million global video chats. Of this, 120 million IMs and 22 million global video chats would be in India.

This would also result in supporting e-learning and e-commerce initiatives undertaken by various agencies both across the world and in India.