Videsh Sanchar Nigam Ltd (VSNL) witnessed a squeeze to the tune of Rs 513 crore in its profits for the financial year 1999-00 with the write down of investment in ICO Global Communication. Traffic volume and Internet subscriber base achieved growth of approximately 17 percent and 72 percent respectively. Due to lowering of Total Accounting Rates (TAR) by 10-14 percent compared to 1998-99 and lowering of the Internet tariffs, the income from ISP operations has not increased proportionately. Turnover for the last fiscal increased by a marginal 2.24 percent to Rs 7,272 crore from Rs 7112.8 crore in 1998-99. The net profits fell by 39 percent to Rs 799.2 crore as compared to Rs 1,325 crore in the previous year.

VSNL carried 2,239.32 million minutes of telephone traffic in 1999-00 as compared to 1,935.04 million minutes last year, representing a growth of 15.72 percent. The profit before tax has risen to Rs 1,949 crore as against Rs 1,914 crore the previous year. Revenues from value-added services grew by 22.48 percent from Rs 492 in the year 1998-99 to Rs 603 crore in the last fiscal.

During the last quarter of the year, the revenues were adversely affected due to adverse exchange parity. Almost 60 percent of the traffic is related to SDR, which appreciated in relation to dollars, thereby, reducing the net receipts of VSNL by approximately Rs 50 crore.

VSNL continued to be the dominant player in the ISP segment. Number of subscribers stood at 3,36,000, while the number of leased-lines for Internet has increased to 622. It also introduced a number of features for its Internet services like multi-lingual services, Internet to paging with agreement with "Easy Call" in addition to commissioning a WAP gateway. To enhance the ISP infrastructure in the country, VSNL slashed international private leased-lines charges by 50 percent to all ISPs. It also reduced the Internet tariffs on new TCP/IP connectivity. The company has made a provision of around Rs 135 crore for the establishment of additional gateways at Kanpur, Bangalore, and Hyderabad.

A number of major projects were initiated to enhance its core network and diversify into provisioning of services and improving connectivity for bandwidth applications. Notable among them is Mumbai-Pune-Arvi microwave SDH system.

Besides, it signed an MoU with ANTRIX, the commercial arm of the Indian Space Research Organization (ISRO) for acquisition of satellite capacity in the Indian Ocean region. VSNL expects significant growth in its transponder requirements both in the C-band and Ku-band over next three years, which justifies the augmentation of the space segment capacity.

VSNL has made an outlay of Rs 7,000 crore for the 9th Five Year Plan (revised upwards from Rs 5,200 crore). This envisages significant investments in transmission and switching infrastructure, information services infrastructure, and infrastructure for global mobile satellite services.

VSNL is also significantly increasing its capacity on optical fibre systems by progressive acquisition. Action for adding additional 155 Mbps (STM-1) capacity between Mumbai-US on all cable routes is being processed and is likely to be completed soon. With the Domestic Long Distance (DLD) segment to be opened soon, VSNL’s future looks bright as it will add new revenue streams for the company.