Bt Settles $50 Million Vsnl Dues

British Telecommunications of the UK and Videsh Sanchar Nigam Ltd (VSNL) have settled their prolonged dispute over unpaid dues of around $50 million, with the multinational telecom major remitting the amount to VSNL.

The two have also initiated talks for finalising telecom accounting rates for the coming year. The much-hyped issue had forced VSNL to block international traffic via BT since early 2000.

BT and VSNL had run into differences over the settlement amount involving transit fees.

The dispute had arisen on, among other issues, the high incidence of transit fees which was being accrued to BT as a result of calls from other carriers transiting through BT, en route to India.

The VSNL move to block traffic had surprised telecom companies in India and abroad. Since BT subscribers were getting across through other carriers who continue to be partners with VSNL, this move never had any impact on the bottomlines of either.

Since the proposed foray into the cellular business without a basic licence will be an unviable investment in the current circumstance, the company may take a relook at its plans. However, the board of directors has not yet taken any decision on this, a top VSNL official said.

The dues pertain to two quarters in 1999. Since these were bilateral issues, the customer did not have any hurdles in linking up between India and the UK as other carriers were also available.

The unprecedented move by VSNL to block traffic via BT had surprised telecom companies in India and abroad. Since BT's subscribers were getting across to India through other carriers who continue to be partners with VSNL, this move never had any impact on the bottomlines of either.

BT's direct circuit with VSNL was blocked after a detailed report was submitted by VSNL to its parent, the DoT.

On account of these dues, the VSNL management was reportedly planning to block any move by British Telecommunications to bid for the state-owned VSNL.

A top official with VSNL had also earlier indicated that BT would not be allowed until they cleared the dues. However, due to strategic reasons, BT did not bid for VSNL.