Tata Communications' shares fall 12% on Flag dispute
MUMBAI: Shares of Tata Communications on Tuesday plunged nearly 12 per cent on bourses, following the Hague district court's decision favouring Flag Telecom in a dispute over access to Flag Europe Asia cable landing station in Mumbai.
Tata Communications touched an intra-day low of Rs 475 before settling at Rs 479.45, down 11.43 per cent from yesterday's close on the Bombay Stock Exchange. On National Stock Exchange, the scrip closed 11.50 down at Rs 479.45, after falling to a low of Rs 475.
A total of 13.96 lakh equity shares of the company changed hands at both the bourses.
The district court of the Hague, Netherlands had upheld the decision of the arbitration panel that VSNL, now renamed Tata Communications, must allow Flag Telecom access to Flag Europe Asia cable landing station in Mumbai.
Flag Telecom (now known as Reliance Globalcom), a subsidiary of Anil Ambani-led Reliance Telecom, wanted access to Mumbai landing station of Flag Europe Asia cable (FEA), a submarine fiber optic cable that runs from England to Japan, for the purpose of enhancing its capacity.
FEA, also called as landing stations, passes through 15 countries. In India, it is routed through Tata Group's Videsh Sanchar Nigam Ltd, which controls its 'Mumbai landing station'.
With technological advances, Flag Telecom is now in a position to enhance the capacity of cable system from 10 Gbps to 80 Gbps and for this it needs access to Mumbai landing station.
But VSNL's stand was that under the construction and maintenance agreement between the two, it was not obliged to grant access to Flag. Flag had thus taken the matter for arbitration before International Chamber of Commerce.
Source: Economictimes
Tata Communications touched an intra-day low of Rs 475 before settling at Rs 479.45, down 11.43 per cent from yesterday's close on the Bombay Stock Exchange. On National Stock Exchange, the scrip closed 11.50 down at Rs 479.45, after falling to a low of Rs 475.
A total of 13.96 lakh equity shares of the company changed hands at both the bourses.
The district court of the Hague, Netherlands had upheld the decision of the arbitration panel that VSNL, now renamed Tata Communications, must allow Flag Telecom access to Flag Europe Asia cable landing station in Mumbai.
Flag Telecom (now known as Reliance Globalcom), a subsidiary of Anil Ambani-led Reliance Telecom, wanted access to Mumbai landing station of Flag Europe Asia cable (FEA), a submarine fiber optic cable that runs from England to Japan, for the purpose of enhancing its capacity.
FEA, also called as landing stations, passes through 15 countries. In India, it is routed through Tata Group's Videsh Sanchar Nigam Ltd, which controls its 'Mumbai landing station'.
With technological advances, Flag Telecom is now in a position to enhance the capacity of cable system from 10 Gbps to 80 Gbps and for this it needs access to Mumbai landing station.
But VSNL's stand was that under the construction and maintenance agreement between the two, it was not obliged to grant access to Flag. Flag had thus taken the matter for arbitration before International Chamber of Commerce.
Source: Economictimes
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