Internet gateway and services provider Videsh Sanchar Nigam Ltd has offered to set up a branching unit on its Tata Indicom Chennai-Singapore submarine cable system for the state-owned telecom company, Bharat Sanchar Nigam Ltd.
The branching cable is to provide connectivity between Andaman and Nicobar Islands and the Indian mainland. It will entail an investment of around Rs 50-70 crore (Rs 500-700 million).
Apart from offering an undersea cable link to Andaman and Nicobar Islands, the branching unit would also help in offering international bandwidth between India and Singapore and further to Europe, US and Middle-East, VSNL said in letter to BSNL, dated August 2.
If BSNL agrees to the proposal, it would be able to access bandwidth from all critical markets in an integrated manner from a single source.
Further, the state-owned telephony major would also be able to access bandwidth over VSNL's two other cable networks, the recently acquired Tyco Global Network and the to be set up submarine cable network SEA-ME-WE-4, it said.
This will also help the best possible use of government resources and avoid duplication of infrastructure creation, the VSNL letter points out.
VSNL terms the proposal as a "win-win situation" for both the companies and for the promoter of both the companies, the Government of India.
For VSNL, the incumbent would be a bulk buyer of bandwidth thus filling capacity faster and for the latter BSNL it would save huge investments that would incur for setting up a similar capacity, the pitch letter says.
According to telecom analysts, if BSNL agrees to the proposal, it will help the state-owned company save over Rs 800 crore (Rs 8 billion) and a time lag of 20-24 months. The PSU was planning to set up its own cable system to Andaman, to provide connectivity between Andaman and Nicobar Islands and the main land.
In July, IT and Telecommunications Minister Dayanidhi Maran had announced that BSNL's intention of laying an undersea cable from Chennai to Sri Lanka, which would also connect Andaman and Nicobar to Singapore.
Earlier, VSNL and Bharti Tele-Ventures had signed an agreement to jointly set up landing stations for the upcoming consortium cable SEA-ME-WE-4.