undersea cable cut means your net speed will be slower as traffic is routed through the pacific(east).
It does not mean that your modem will not connect, as the OP has complained.
I had similar problem in my airtel connection, where I would have frequent disconnections.
I diagnose I opened up the SNR page and started refreshing it.
SNR was dropping to around 7dB and then connection would drop.
Then I removed the splitter, snr went upto 19dB.
This is also bad but I did not get disconnection.
Then I called airtel chaps, their engineer came and he was knowledgeble about snr and stuff.
He suggested I change the cable from the telephone point to my modem(its a 5 meter cable).
I did the same, and even with splitter the snr is around 30dB+ always.
And yes you have to have airtel landline connection. Its included. the 256kbps UL is 999 and the 512kbps ul is 1499
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