Rel Comm lines up $1.5 bn for Flag

Telecommunications major Reliance Communications will invest $1.5 billion (around Rs 7,000 crore) in Flag Telecom, its under-sea cable subsidiary, over the next three years.

The investment will help lay an additional 50,000 km of optic fibre cable and expand the company's reach to over 60 countries.

"Over the next three years, Flag Telecom will build the world's largest internet protocol (IP) network over submarine cable systems. Termed FLAG-Next Generation Network (FLAG NGN), the project will cater to over 5 billion customers across the globe," Reliance Communications Chairman Anil Ambani said here today.

He added that Flag Telecom should become the third largest undersea cable system player in the world once the project was commissioned.

Next Generation Network (NGN) is a broad term used to describe some key architectural advances in telecommunication core and access networks.

The idea behind NGN is that one network transports all information and services (voice and data included) by encapsulating them into packets "" similar to what the Internet does.

Flag's global network will span 1,15,000 km by December 2009, taking the total optic fibre assets of Reliance Communications to over 2,30,000 km. The company would fund the project through internal accruals and debt, said Ambani.

At present, Flag Telecom operates the world's largest private under-sea cable system spanning 65,000 km and has a customer base of over 200 leading operators, which include the top 10 international carriers.

Flag NGN will comprise four networks, with the first being an Asia connectivity link. The link will connect India, Malaysia, Indonesia, Vietnam, the Philippines, Brunei and Hong Kong.

The second system will be for the African region and will connect Kenya, Mozambique, South Africa, Tanzania, Madagascar and Mauritius. The third will be for the Mediterranean region and connect countries like Greece, Cyprus, Turkey, Malta, Libya and Lebanon, while the fourth will be a trans-Pacific link connecting the US west coast, Japan, China, and Hong Kong.

Flag's global network will have a capacity to carry 2.5 billion simultaneous voice calls, 300 million simultaneous web chat, and 52 million simultaneous video chat, and enable 20 million students in Indian educational institutions to pursue e-learning simultaneously.

Reliance Communications had acquired Flag Telecom for $207 million in October 2003.