The Hindu : VSNL opts for new business models

Online edition of India's National Newspaper
Wednesday, Sep 03, 2003

Business

Business

VSNL opts for new business models

Ratan Tata

MUMBAI SEPT. 2. Videsh Sanchar Nigam is opting for new business models, including Internet Protocol based Virtual Private Network (IP-VPN), Microprotocol Label Switching (MPLS) services, even as it has earmarked Rs. 200 crores as capital expenditure in the current financial year.

"Our International Long Distance (ILD) business will be under pressure with the emergence of new players, including Bharat Sanchar Nigam (BSNL) and Mahanagar Telecom Nigam (MTNL)," VSNL Chairman, Ratan N. Tata, said at the company's annual general meeting here today.

"Going forward, new business models are necessary to sustain our revenues, especially with VSNL's monopoly ceasing to exist by 2004," he said, adding the company had also appointed Boston Consulting Group as advisors.

Apart from IP-VPN and MPLS services, VSNL was also planning to offer Internet Protocol Locator System (IPLS) and ATM services among others, which have a great potential, N. Srinath, Director (Operations), said.

The Boston Consulting Group, which has been advising VSNL from July 2002, would chart a business plan for new ventures, Mr. Srinath said, adding, it had been helping VSNL in identifying new business ventures, cost-reduction initiatives and business process develop- ments.

On the capex for the current fiscal, Mr. Tata said of the total Rs. 1,200 crores, Rs. 200 crores would be spent for establishing bandwidth and long distance networks, Rs. 245 crores for developing submarine cables and Rs. 36 crores for voice operations.

Around Rs. 205 crores would be invested in Tata Teleservices, while the remaining Rs. 114 crores would be used for other expenses, Mr. Tata said.

On the investments in TTSL, Mr. Tata said VSNL had so far invested Rs. 236 crores, of the total Rs. 836 crores permitted by the board. VSNL had sought to invest Rs. 1,200 crores, but the board had scaled it down to Rs. 836 crores. — PTI

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