The Government of India has now allowed Flag Telecom, an international long distance bandwidth provider, to sell bandwidth directly to customers in India. Earlier Flag had an understanding with VSNL to sell bandwidth only to it and not to customers directly. According to an announcement made by Pramod Mahajan, Minister of Communications, the dispute between the two carriers has now been resolved and Flag can now sell bandwidth directly to ISPs in the country with immediate effect. When international long distance players begin their operations from April 1, 2002, Flag will be able to sell bandwidth to ILD players as well.
This means that ISPs can directly negotiate with Flag Telecom and get better rates. Sensing competition VSNL has also announced a reduction in international bandwidth rates by 35-40 per cent. The rate reduction will be subject to the approval of Telecom Regulatory Authority of India. Speaking about Flag's opportunity in the current scenario, FLAG Telecom's director South-Asia, Niraj K Gupta said, "Once access charges are finalized, we will fix the rates. We will be competitive, not only in pricing but also in product rollout and quality of service. The access charge is expected to be finalized by the government soon. The deregulation is a good move for the country and competition is better for the service provider." Flag has an undersea cable landing station at Mumbai.
Meanwhile S K Gupta, CMD, VSNL submitted an interim dividend cheque of Rs 1,132 crore to the Communications Minister Pramod Mahajan for the 52.97 percent government stake in the