India’s Reliance Communications is planning to sell its Fibre Link Around the Globe (FLAG) submarine optical fibre network, which it bought in 2003 for US$207 million. It is the world’s largest private undersea cable system, spanning 65,000 kilometers. It is integrated with Reliance’s 190,000 kilometers of domestic optic fiber and provides a delivery platform connecting 37 business markets in India, the Middle East, Asia, Europe, and the U.S. Latest figures show that Reliance Globalcom – that administers the Flag network – contributes 31 per cent of the company’s revenues and provides 26 per cent of operating profit.
Therefore, Reliance must be having a “very good” reason to sell off the goose that has been laying the golden eggs. Reliance is in sixth place with a market share of just 3.98 per cent and 14.6 million mobile customers. It is reportedly planning to raise some $3 billion to expand its GSM mobile service in India’s booming mobile market.
Flag may help inject the necessary cash to fulfill the conglomerate’s mobile dream. But its exit from capacity business will reduce Asian dominance in the global connectivity. Defying the political hubris Reliance and China Telecom has connected respective country through a 293 kilometers-long terrestrial optical fibre cable across the Tibetan Sio-Indian border in August. Its initial lit capacity is 20 Gbps, with a maximum design capacity of 4.8 Tbps over 6 Fibre-pairs (See bellow).
This “21st century Silk Road” is expected to bring commonsense among the two Asian powers with global significance. Reliance, along with China Telecom, will be credited for this taking this giant leap together. But the former may have already bowed out of the global bandwidth arena by then.
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