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Reliance buys FLAG

  • From: Suresh Ramasubramanian
  • Date: Mon Nov 03 06:23:16 2003

Which means that the undersea cable that feeds most of the connectivity to India (and till recently was, other than satellite, the main connectivity coming in here), now gets to be open to all comers I guess.

The (former) incumbent monopoly telco VSNL had exclusive landing rights and reselling rights on FLAG - and

1. refused to allow local peering
2. lit up maybe a fraction of available FLAG capacity (even though there was a lot of demand)

This sounds real good to me - except that Reliance is not exactly the sort of company I'd choose to do this.

http://www.convergenceplus.com/oct03%20itu%2042.html
October 17, 2003
Reliance to acquire FLAG for $207 million
GENEVA -- FLAG Telecom Group Ltd., a leading provider of international wholesale network transport and communications services, has entered into an agreement and plan of amalgamation with Reliance Gateway Net Pvt. Ltd., a wholly owned subsidiary of Reliance Infocomm Ltd., pursuant to which Reliance Gateway will acquire 100 percent of the company's common shares ...

Reliance, India's largest business group, is a major customer of FLAG. It holds 18 fixed licenses around the sub-continent, as well as running cdma2000 1x WLL (M) services.

FLAG was formed in 1997, the world's first non-club cable operator. However, it was hit by the waves of fresh long-haul capacity launched into the international market by companies such as Global Crossing, Asia Global Crossing and Level 3. It emerged from bankruptcy in October 2002. Although it signed $77 million of new business in the first two quarters this year, FLAG Telecom Group's second quarterly filing showed a loss of $25.8 million on revenue of $33.5 million. 
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