Reliance Jio Infocomm, Vodafone and five others bunch up to build undersea cable system

Vodafone Group Plc and Reliance Jio Infocomm have formed a consortium along with a group of telecom carriers to set up an undersea cable system to connect Southeast Asia with the Middle East, across the Indian Ocean.

This 8,000-km-long Bay of Bengal Gateway (BBG) undersea cable system will also have connections that would reach out to India and Sri Lanka. Other telecom carriers who joined forces include Dialog Axiata from Sri Lanka, Omantel, Etisalat from the UAE and Telekom Malaysia Bhd. The parties signed the agreement and the supply contract on April 30th in Kuala Lumpur.

This cable system when built would offer upgradeable and transmission facilities with 100 Gbps capability. The cost of the cable system, however, has not been disclosed yet. It is likely to carry commercial traffic by the end of 2014.

Some analysts predict that the upcoming BBG undersea cable system will play a crucial role in breaking the monopoly of the existing operators in the region. In addition to that, it will also minimize the cost of infrastructure for the consortium partners.

This new tie-up is critical for Mukesh Ambani’s Reliance Industries and it gears up for the launch for 4G services in India. Reliance is presently the only company to have permits for 4G services in India. It is expected to launch the 4G high-speed wireless data services later this year and is also seeking international bandwidth.

This shows how telecom companies in India are putting forth their money to set up wireless data networks in a market where only a tenth of the population uses the internet. Although use of data services is growing at a faster rate in India, 80 percent of the revenue earned by telecom carriers is still earned from voice calls.In fact, major Indian telecom operatorscollectively spent $20 billion to acquire 3G and 4G airwaves in an auction that took place in the year 2010.

BBG is a major step towards business growth since it will provide with a backing for present and potential high-end requirements of next generation Internet applications and requirements of surrounding regions.

Apart from providing connectivity between Southeast Asia, South Asia and the Middle East, the BBG undersea cable system will also provide connectivity to Europe, Africa and Far East Asia.This will be carried out through inter-connections with other existing cable systems in India, the Middle East and Far East Asia.

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