VSNL Lists out its Future plans

In its 15th Annual General Meeting held in Mumbai recently, VSNL deliberated on last year's performance, current developments and future plans of VSNL. VSNL's total revenues at Rs.7966 crores were higher than previous year's total revenue of Rs. 7222 crores, a growth of 10.30%. Profit before tax at Rs.2470 crores was 27.11% higher than the RS. 1943 crores for last year. After making provision of Rs. 789 crores (previous year Rs.638 crores) towards Income tax and prior period adjustments, the profit after taxes and adjustments at Rs.1779 crores was higher than the last year's figure of Rs.840 crores by more than 111%. While telephony has contributed Rs.6483 crores (Rs.6287 crores), Internet services contributed Rs.298 crores (Rs.209 crores) to total revenue; Other Income contributed Rs.668 crores (Rs.254 crores); Income from Intelsat grew from Rs.74 crores to Rs.116 crores.

With its monopoly status in International Telephony coming to an end on 31.3.2002, it is taking advantage of the government's liberalisation initiatives to focus on Internet Related Services. VSNL enjoys a huge competitive edge in this area and plan to develop this area further. The Internet access backbone is being extended and will cover 20 cities by March 2002. Bandwidth which has grown from 167.1 Mbps in March 2000 to 754.1 Mbps in March 2001, has already crossed the 1 Gbps mark and will be around 1344 Mbps by December 2001. TV Up-linking is another focus area. The government has since July 2000 allowed channels to up-link their TV programs from the country. VSNL has been providing up-linking since October, 1998 and serves 12 regional channels, through its earth stations in Chennai, New Delhi and Ernakulam using INSAT - 2E. VSNL will now be able to expand its customer base in this segment as many more smaller channels will take advantage of this liberalisation and VSNL's efficient and economic services. Domestic Long Distance is another area which it plans to get into. A recent TRAI report estimates this market at Rs.151 billion for year 2001-2002. VSNL in losing its monopoly on international telephony, has been offered a DLD licence and some financial advantage with regard to the same. VSNL expects to take benefit of the same and plans to position itself as a wholesale DLD service provider; the rollout plan for this will draw leveraging on the strengths of its existing infrastructure. It also plans to get into Direct-to-Home. VSNL with Ku band transponders in Delhi and Chennai is developing a financially sound business plan, to enter this area. It plans to acquire more Ku band transponders and set up a teleport. It will make DTH a logical and profitable extension of its TV up-linking business.

It is expected that VSNL will spend approximately Rs.2000 crores during the current year out of its budgeted five-year capital outlay of Rs.5912 crores upto March 2002. This will include a fully integrated digital network with ATM switches, commissioning of earth stations at Hyderabad, New Delhi, Patna and Gandhinagar and commissioning of SAFE cable system at Cochin.

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