Financial Daily from THE HINDU group of publications
Tuesday, Feb 24, 2004
Info-Tech - Telecommunications
VSNL blocking FLAG, says Reliance
New Delhi , Feb. 23
RELIANCE Infocomm has complained to the Telecom Regulatory Authority of India (TRAI) that its wholly-owned subsidiary, FLAG Telecom, which owns and manages an extensive undersea optical fibre network, is being prevented by Videsh Sanchar Nigam Ltd (VSNL) from selling international bandwidth at competitive rates to IT-enabled services in the country.
The TRAI's attention has been drawn to the fact that "VSNL has sought to assert that it has the right to determine those entities to whom FLAG can sell/lease capacity. There is no contractual or factual basis to support VSNL's position. VSNL with the intent of denying access to capacities to Indian operators is forcing FLAG to sell capacities to its preferred international carrier partners VSNL."
Reliance has further noted that despite clear-cut decision of the Government, VSNL did not allow the sale of capacity by FLAG directly to ISPs (Internet Service Providers) and ILDOs (International Long Distance Operators) on the pretext of negotiating access agreement that was finally signed in January 2003.
"While signing the access agreement with FLAG, VSNL restricted the sale of capacity by it although it can offer up to 30 GB capacity through VSNL landing station. The total access charge being levied by VSNL is approximately 30 times the international average charge for international bandwidth access. In order to commence business, which was not possible without access to bandwidth, Reliance singed the agreement with VSNL under duress," the TRAI has been told.
India's competitiveness as a global power in IT and e-commerce has increased the demand for telecommunications services. Although there is much unused capacity in several of the cable landing systems, the commercial practices of VSNL have created an artificial shortage of capacity which prevents operators from meeting the full bandwidth demand of their customers, the TRAI has been informed.
Charges `baseless, unwarranted'
VSNL officials have refuted the allegations by Reliance and stated that the company has never disputed FLAG's entitlement to sell assignable capacity to ITES (IT-enabled services),
However, FLAG refuses to understand and accept that entering into an agreement recording a mutually acceptable reasonable terms and conditions by FLAG and VSNL for making the necessary equipment and facilities available at the Mumbai landing station, is a condition precedent to any such sale.
"VSNL has always been and is ready and willing to negotiate reasonable terms and conditions with FLAG for lease of any additional assignable capacity to ITES, subject to receipt of certain information and clarifications from FLAG. Therefore, the claim that VSNL is trying to control the amount of capacity provided are totally baseless, unwarranted and not true," they noted.
Much contrary to the unwarranted and casual statements by FLAG that VSNL is undermining India's attempts to become a global power, VSNL is, for just and fair reasons, supporting the legitimate claims of international telecom entities by attempting to ensure that its obligations under any agreements or arrangements with a third party are carried out in strict compliance with the spirit and law of the same.
FLAG has been continuously but deliberately trying to create an impression and fear among the ITES that even today the bandwidth shortage continues to plague Indian telecom sector. It is FLAG's arbitrary behaviour which was in fact jeopardising the customers of IT industry in India and engaging VSNL to furnish clarifications and reassurances to other telecom entities, they noted.
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