Google, RCom in talks for Flag Tele cable deal

Internet major Google is in early stages of negotiations with Reliance Communications to take a part of the Flag Telecom's trans-Pacific undersea communications cable on a long-term lease.

Google is believed to be in talks to take on lease 500 GB bandwidth and this, according to industry sources, puts the deal size at around $80-100 million (Rs 320-400 crore).

According to sources close to the development, the companies have initiated talks to set up a joint cable under a "cooperative arrangement".

Under the broad contours of the discussions, Flag Telecom will sell dark fibre to Google. This will help Google save the cost of duplicating a fibre optic network, which would cost around $350-380 million (Rs 1,400-1,500 crore).

With the availability of dark fibre, Google will only need to invest in lighting up the cable, and it would give the company a self-managed, fully secure network.

While for Reliance Communications, with such a pre-sale deal, it would get a reasonable proportion of the capex that would be used for construction of the cable.

When contacted, a Reliance Communications spokesperson declined to comment.

Sources also said Reliance Communications would also look at selling lit-capacity on its global internet protocol networks to Google. Flag has lit-up capacity on its Falcon cable in Wes Asia and other cables on the Mediterranean and East African coasts.

Flag Telecom had recently announced its plan to set up trans-Pacific cable, under its Rs 6,000 crore next- generation network expansion plan. A cable on the trans-Pacific route would cost around Rs 1,400-1,500 crore. ($350-380 million).

Flag has recently awarded construction of its four submarine cables under the Flag NGN plan to Japanese giant Fujitsu.

The move also gains importance as Google was planning to set up its own sub-sea cable across Pacific, under a project called Unity. However, it could not be ascertained whether Google would go ahead with the project or shelve it by leasing a portion of Flag's trans-Pacific system.