Fujitsu takes all of Flag's $US1.5b sub cable rollout

Stuart Corner
Tuesday, 04 September 2007 12:41

Business IT - Networking

Fujitsu has scored a massive $US1.5 billion contract from Flag Telecom to lay all 50,000kms of its global network expansion, plans for which were announced last December. Separately Fujitsu has won a capacity upgrade contract for A Pacific Crossing cable network.

Flag, owned by India's Reliance Communications, announced in December plans to lay an IP network comprising an additional 50,000 kilometres of submarine cable in four systems around the world. The buildout will nearly double the length of Flag's global network from 65,000km to 115,000km, and extend its reach to 60 countries that between them represent 90 percent of global GDP.

When completed in early 2010, the Flag Global Network will comprise:
- Flag NGN System 1, connecting India, Malaysia, Singapore, Indonesia, Vietnam, Philippines, Brunei and Honk Kong;
- Flag NGN System 2 connecting Kenya, Mozambique, South Africa, Tanzania, Madagascar, Mauritius;
- Flag NGN System 3 connecting Greece, Cyprus, Turkey, Malta, Libya, Lebanon;
- FLAG NGN System 4 connecting the US West Coast, Japan, China and Hong Kong.

Reports in the Indian press when the expansion plans were announced said that Flag had shortlisted NEC, Fujitsu, Tyco Electronics and Alcatel-Lucent to build the system and that contracts would be awarded at the end of January enabling construction to begin in February. So the project is now running about six months behind schedule/

Award of the entire $US1.5b contract to Fujitsu will be a substantial blow to the other contenders. Announcing the deal, Reliance said: "Fujitsu has won this contract due to its highly reliable equipment and reputable turnkey project management capability under the very tough competition against other suppliers."

Reliance Communications acquired Flag Telecom in January 2004. Since then Flag has invested over $US500 million to expand its network and has financed this investment entirely through cash flow generated from operations. Flag has also moved up the value chain and introduced higher value-add products including IPLCS, VPN and ethernet services. As a result of these initiatives, Flag says it has been accelerating the growth of its revenues and increasing its margins.