Reliance buys Flag

Reliance Industries, India's largest private sector firm, announced its acquisition of Flag, an ailing fiber-optics firm which had only recently come out of Chapter 11 proceedings, for about $207 million (at its peak, Flag was worth $7 billion). This is Reliance's largest overseas purchase and second only to Tata's purchase of Tetley Tea in terms of overseas acquisitions by Indian firms.

Interestingly, Tata-owned VSNL is a reseller of Flag bandwidth in India. Wonder what this acquisition will do to that arrangement.

Flag currently has about 10 GBps of bandwidth coming into India via submarine cable. I suspect that with the acquisition of Flag, Reliance will be able to provide dirt-cheap rates on International long-distance calls. Watch this space.