Flag Telecom awards $1.5 billion contract to Fujitsu

Flag Telecom, an international provider of bandwidth owned by Reliance Communications Ltd. in India, has awarded a US$1.5 billion contract to Fujitsu Ltd. for the construction of Flag's next generation network (NGN) submarine cable.

Four new cable systems will be constructed across the Mediterranean, East Africa, Asia and the Pacific region, Reliance said on Tuesday. Scheduled to be completed by March 2010, the new IP (Internet Protocol) network over submarine cable will nearly double the length of the Flag global network from the current 65,000 kilometers to 115,000 kms.

The network expansion will meet data communications requirements of Flag's more than 200 international customers, consisting of telecommunications service providers, content providers and ISPs (Internet service providers), as well as Reliance enterprise customers in India and those of Yipes Holdings Inc. in the U.S., a Reliance spokesman said Tuesday. Reliance announced in July that it is acquiring Yipes, a U.S. provider of Ethernet managed services.

Reliance also plans to use the Flag network to roll out Yipes' service worldwide. "We aim to be a global infrastructure provider," the spokesman said.

Indian telecommunications infrastructure and services providers like Reliance and Videsh Sanchar Nigam Ltd. (VSNL) have invested in communications infrastructure outside India to strengthen their offerings in the country and address global markets. VSNL acquired in Tyco Global Network, a submarine fiber optics telecommunications network, from Tyco International Ltd. in July 2005.

The Flag NGN project consists of four systems. System 1 will connect India to Hong Kong with potential interconnection to Thailand, Malaysia, Singapore, Indonesia, Vietnam, Philippines and Cambodia. Flag NGN System 2 will connect India to Kenya with potential extension to South Africa and Reunion, and later Mozambique, Tanzania, Madagascar, Mayotte and Mauritius. System 3 will connect Egypt to France with potential extension to Syria, Greece, Cyprus, Turkey, Malta, Libya, Tunisia and Italy, while System 4 in the Pacific will link Japan to the U.S. west coast.

The $1.5 billion contract to Fujitsu covers the cable build, including installation, commissioning and testing of Systems 1 and 3. A letter of intent has been issued to Fujitsu for the other two systems, and the contract for these will be awarded later, Reliance said.

Reliance Communications, a communications and infrastructure company in Mumbai, acquired Flag Telecom Ltd. in January 2004 as part of its strategy to be a communications bandwidth provider to customers in India and other countries.