VSNL, Bharti ink Rs 500 cr NLD backbone deal

Bharti Infotel, a subsidiary of Bharti Tele-Ventures, today announced it will share its national long distance (NLD) network with Videsh San...

Bharti Infotel, a subsidiary of Bharti Tele-Ventures, today announced it will share its national long distance (NLD) network with Videsh Sanchar Nigam Limited (VSNL).

As part of this first such agreement between two leading telecom players, VSNL will have the right to use Bharti’s NLD backbone for a payment of Rs. 500 crore.

VSNL will have the right to primarily use 1,00,000 km dark fibre of Bharti’s NLD network, which is less than 20 per cent of the NLD capacity currently available with Bharti.

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VSNL is in the process of starting its STD operations across the country and the agreement with Bharti would help the firm save huge investments on infrastructure.

The agreement is for a period of 15 years. Announcing the agreement, Rajan Bharti Mittal, joint managing director, Bharti Tele-Ventures, said, ‘‘Bharti has always been a strong advocate of the sharing of infrastructure on mutually beneficial terms, so as to optimise investments. This applies not just to the long distance network but also to other infrastructure like cell sites for mobile operations.’’

For Bharti, the deal would result in higher revenues, reduction in operating costs, savings in finance costs and significant improvement in cash flows without impacting capacity , the firm said.

VSNL managing director S K Gupta said in a statement, ‘‘The agreement, along with our own submarine cable, will ensure that the company’s enterprise and broadband customers get end-to-end connectivity.’’ He said VSNL’s existing business segments will have a captive source of domestic bandwidth for present and future growth drivers, resulting in significant cost savings.

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In addition, he said, ‘‘A self-managed domestic backbone will also equip us with greater control on quality, reliability and uptime of our services.’’