Business | Tue Apr 30, 2013 3:36pm IST

Vodafone, RIL in consortium to build undersea cable

MUMBAI (Reuters) - A group of telecommunications carriers including Vodafone Group Plc (VOD.L) and Reliance Industries(RELI.NS) have joined forces to build an undersea cable system across the Indian Ocean to connect Southeast Asia with the Middle East.

The 8,000-kilometre Bay of Bengal Gateway cable will link Malaysia and Singapore to the Middle East and will have connections to India and Sri Lanka, Reliance said on Tuesday.

The cable system is expected to carry commercial traffic by the end of 2014, it said. Other members of the consortium are Telekom Malaysia Bhd (TLMM.KL), Omantel OTL.OM, Etisalat ETEL.AD and Dialog Axiata DIAL.CM.

The new cable system is significant for energy-focused Reliance, controlled by India's richest man, Mukesh Ambani, as it readies the launch of fourth-generation (4G) telecom services in the world's second-biggest telecommunications market and is looking for international bandwidth.

The move also illustrates how Indian carriers are investing to build wireless data networks in a market where more than 80 percent of the carriers' revenue is still from voice calls. Data services are growing much faster in India where just a tenth of 1.2 billion people use the Internet.

Carriers in India spent a combined $20 billion to buy 3G and 4G airwaves in a 2010 auction.

Reliance, the only company in India to have nationwide permits for 4G services that enable high-speed wireless Internet, is widely expected to launch the services later this year and is sewing up deals with rival carriers.

Last week it signed a deal to lease undersea cable capacity from Bharti Airtel(BRTI.NS) on the Chennai to Singapore route.

Earlier this month, Reliance Industries said it will lease inter-city optic fibre capacity from Reliance Communications (RLCM.NS), owned by Mukesh's younger brother Anil.

(Reporting by Prashant Mehra and Devidutta Tripathy)

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