Flag, VSNL spar over bandwidth

TATA group company VSNL, one of the original investors in the Flag Cable Systems in 1995-1996, has been accused by Flag Telecom Ltd, a Relia...

TATA group company VSNL, one of the original investors in the Flag Cable Systems in 1995-1996, has been accused by Flag Telecom Ltd, a Reliance company, of artificially restricting access on Flag Europe Asia (FEA) cable and preventing the ability to respond to market demand.

‘‘While Flag capacity remains artificially restricted as access supply remains in the control of VSNL for allocation, we do not have the ability to respond to market in line with demand for the good of the industry or the Indian economy,’’ a Flag Telecom spokesperson said on Tuesday.

VSNL is one of the landing signatories of Flag Telecom and it maintains and provides access to companies on FEA cable through its landing station in Mumbai.

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Sources said the FEA cable had an assigned capacity of 15 STM-1s, which was hiked by 17 STM-1s after Flag Telecom claimed that it wanted to sell extra bandwidth to new clients. They claim that Flag even said it has a list of 26 clients that it expects to provide the extra capacity, but later backed out saying that most clients were not ready to sign a long-term deal with them. Of the additional capacity (17 STM-1s) at the VSNL landing station, five were assigned to VSNL and six to various Reliance companies.

Flag claims that VSNL is yet to exercise the option of buying the five STM-1s assigned to it. But a VSNL source said, ‘‘Flag by itself has declared their inability to sell capacity in the Indian market.’’

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