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September 24, 1998

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VSNL to invest Rs 10 billion this fiscal

Email this story to a friend. Public sector telecommunications giant Videsh Sanchar Nigam Limited plans capital expenditure of about Rs 10 billion in the current financial year on development of the basic international telephone business as well as specialised and value-added services, officiating Chairman and Managing Director Amitabh Kumar has announced.

Addressing the 12th Annual General meeting of the company, Kumar said Rs
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VSNL to invest Rs 10 b
4.47 billion was invested in various programmes in 1997-98.

These are part of the Rs 50.31 billion capital expenditure planned during the Ninth Five-Year Plan period, he said.

The company is implementing major projects like SEA-ME-WE (Southeast Asia-Middle East-Western Europe), a three optical fibre cable system, a network management centre, additional earth stations, investment in ATM and network management system and value-added services, he said.

He informed the AGM that a decision on the transit services joint venture and regional hub project is expected soon.

The company also expects to shortly finalise joint venture for mobile satellite services and set up a subsidiary for value-added services.

Kumar said VSNL continued with its aggressive strategy for upgrading its infrastructure and commissioned additional gateways at Ernakulam and Jalandhar during 1997-98.

The FLAG cable connecting India with 40 countries from the Far East to Western Europe was also commissioned in December 1997. The company also invested during the year on video up-linking facilities for data and value-added services.

Three of its earth stations for television up-linking facilities are ready for operation.

He said the new up-linking policy enabled VSNL to offer up-linking services to Indian television channels through its network of earth stations.

The liberalisation of Internet services allowing private operators to build their own networks and offer Internet and related services would generate additional business for VSNL, he pointed out.

Keeping with the rapid decline in telecom accounting rates worldwide, VSNL has followed a policy of an annual reduction of 8 to 10 per cent, bringing them closer to operating costs in the sector.

Meanwhile, the company has continued negotiations with US carriers and will finalise accounting rates soon, as the present US rates are not consistent with international convention.

Kumar said improved telecom capacity due to the continued line roll out in India would contribute to the strong traffic growth.

Moreover, improvement in infrastructure is expected to boost demand for basic international telephony as well as data and leased line services.

Highlighting the company's financial performance, he pointed that despite the Asian crisis and economic slowdown, it continued strong performance. During 1997-98 the company showed a volume growth of 21.63 per cent over the previous year. Its revenues and net profit increased by 22 per cent and 92 per cent respectively to reach Rs 64.36 billion and Rs 9.68 billion.

The company handled 1.685 billion minutes of telephone traffic during the year, a growth of 21.63 per cent.

UNI

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