International long-distance telecom operator Data Access will form a consortium with two companies from Bahrain and Saudi Arabia to set up a submarine cable linking Mumbai and the port of Fujairah in the United Arab Emirates.

The total investment is estimated at $100 million. The undersea cable will have a bandwidth of over 8 terabits.

Data Access Managing Director Siddharth Ray confirmed the move, and said a formal announcement was expected in a week. Construction was expected to begin in December, and the project would be completed in 12 months, Ray said.

Explaining the need for another undersea cable, Ray pointed out that the group would require large bandwidth at its proposed software park in Bangalore.

Data Access is scouting for partners for the proposed Rs 2,000 crore project, for which it has projected a demand of over 20 gigabits of bandwidth.

Such large bandwidth was not available in India through existing undersea cables, he said.

Besides, Data Access is one of the largest international long-distance operators in the country after Videsh Sanchar Nigam Ltd, and controls over 30 per cent of the international long-distance market in India.

It will, therefore, require bandwidth for its international voice business, a bulk of which it is now transferring by leasing out satellite capacity.

The deal comes close on the heels of the Reliance group buying international undersea cable giant Flag Telecom for $207 million.

This 50,000 km undersea cable connects India to mid-east Europe, the US and the Far East, and still has some capacity available.

But Data Access' project comes at a time when some new capacities are coming up in India.

For instance, SeaMe We 3, the consortium cable in which VSNL is a partner, is raising capacity 38 per cent. Also, SeaMe We 4, again with VSNL as partner, is a new project that will become operational by 2005.

Even Bharti Enterprises, which has a joint venture with Singapore Telecom, has set up a cable between Chennai and Singapore with 8 terabits of capacity.

At the moment, the demand for bandwidth, which includes voice and data, from India is estimated to be not more than 5 gigabits.

But analysts believe that with bandwidth prices falling to as low as 10 per cent of current prices, the data market could grow 3-4 times.

The cable link

• Data Access will form a consortium with two firms from Bahrain and Saudi Arabia to set up the project linking Mumbai and the port of Fujairah in the UAE.
• The undersea cable will have a bandwidth of over 8 terabits.
• A formal announcement is expected in a week.
• Construction is expected to begin in December, and the project will be completed in 12 months.