Financial Daily from THE HINDU group of publications
Thursday, Dec 23, 2004
Info-Tech - Telecommunications
Reach, VSNL oppose integration of Flag, Falcon
Thomas K. Thomas
New Delhi , Dec. 22
INTERNATIONAL wholesale carrier Reach and VSNL have raised objections to the proposed integration of the FLAG Europe Asia (FEA) cable system with FALCON, both owned by Reliance Industries.
The two international long-distance carriers have written to FLAG seeking a meeting of the Management Committee to discuss the proposal.
Reach, one of Asia's largest international wholesale carriers of combined voice and data services, is promoted by Telstra and PCCW.
In a letter to Mr Owen Best, Chairman, Flag Telecom Ltd, Reach and VSNL have also raised objections to the upgradation of FEA cable between the UK and the UAE on the grounds that the move was unauthorised and that the consent of the stakeholders was not taken before taking the decision.
While Reach claims to have 4.6 per cent of the voting rights in FLAG, VSNL controls about 5.2 per cent of the voting rights.
Reliance sources said that the charges were baseless and a detailed response would be given by the company on Thursday.
The fresh salvo comes after VSNL had complained to the telecom regulator that FLAG was selling international bandwidth only to Reliance.
FLAG executives on Wednesday said that the VSNL complaint was incorrect, since it had offered bandwidth to other long-distance operators and ISPs in the country but found no takers.
"FLAG cannot sell bandwidth directly to end-consumers. Indian carriers were not interested in our offer so we had no option but sell bandwidth to Reliance Infocomm, which in turn resold it to the end consumer."
The FLAG executives also said that some ISPs have subsequently bought bandwidth and the company was awaiting release of capacity from VSNL.
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