The Hindu : Business : FLAG Telecom to initiate action against VSNL

Online edition of India's National Newspaper
Friday, Dec 31, 2004

Business

Business

FLAG Telecom to initiate action against VSNL

MUMBAI, DEC. 30. The global telecom carrier FLAG Telecom, a Reliance group entity, will initiate arbitration proceedings against Videsh Sanchar Nigam Ltd. (VSNL), alleging that the Tata group company was blocking access to FLAG Europe Asia (FEA) cable at the latter's Mumbai landing station.

"In order to exercise its rights, FLAG has been forced to initiate arbitration proceedings under the provisions of the Construction and Maintenance Agreement (C&MA),'' FLAG Telecom said in a release here today.

The arbitration was to uphold FLAG's right to access the available capacity on FEA cable and carry out an upgrade on the cable at the Mumbai landing station, which is controlled by VSNL, it said.

In addition, significant capacity could be added at FLAG's expense within a few months. This would further increase the value offered to customers through lower prices, it said.

However, FLAG did not provide specifics on the proposed upgradation of the cable, a move that is being opposed by VSNL and REACH, another international telecom carrier.

Earlier, VSNL had accused FLAG of unlawful upgradation of FEA cable and had sent a letter to the Telecom Regulatory Authority of India (TRAI) citing fears of a diversion of FEA cable to a landing station owned by Reliance in Mumbai.

FLAG has so far been thwarted by the "monopolistic behaviour'' of VSNL, which controls all cable landing stations on the west coast of India and refuses to allow access and interconnection of FLAG traffic in Mumbai, it said.

"This has the inevitable effect of denying international carriers and consumers the choice and services they need and, more importantly, causes damage to the Indian and global economies,'' it said.

FLAG has ready availability of capacity but, because access to the landing station is controlled by VSNL, it cannot give assurances that customers require while purchasing bandwidth, it said.

For this reason and the cost charged by VSNL for interconnection, FLAG is unable to offer the value for money it wanted to offer.

FLAG has been negotiating in good faith for many years with VSNL, Indian Government and TRAI, to enable it to provide access to all existing capacity and allow addition of capacity on FEA Cable in Mumbai, it said.

"Access to capacity to India is being restricted and has been restricted for years,'' it said.

It also quoted a recent CompTel/ASCENT, a global association of 400 telecom carriers, study that accused VSNL of blocking capacity, thereby violating World Trade Organization norms under the General Agreement on Trade in Services.

VSNL's restrictions violates India's general obligation to allow access and use of public telecommunications network under Article 5(a) of GATS Telecom Annex,'' the study had said.

— PTI

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