VSNL de-risking revenue model

Videsh Sanchar Nigam Ltd (VSNL), owned by the $12 billion Tata group, is de-risking its revenue model by accelerating growth in other businesses and diversifying into related high-potential areas, the company's annual report for 2003-04 said. The company will hold its annual general meeting on September 2.

VSNL is also simultaneously improving the voice business with new products and enhanced levels of service.

"While VSNL intends to maintain its current leadership in the international telephony market, this segment will account for a progressively lower share of VSNL's overall revenues owing to rapid growth in other businesses," the report said.

In 2003-04, the share of 'international telephony and related service' business fell to 86 per cent of VSNL's revenues from 91 per cent in 2003-04. Share of 'other services' increased to 14 per cent from 9 per cent a year earlier.

Other services include national long distance, Internet services and TV up-linking services.

According to the company, the biggest challenges in the international telephony are to improve volumes, revenues and margins.

VSNL said it has implemented a multi-carrier billing system, which solves interoperability issues and does not require other carries to install their equipment at VSNL, thus reducing both the delays and costs of commencing relationships with new carriers.

In the international telephony segment, VSNL is also building its ability to pick up traffic overseas through point of presence in various countries to offer more attractive packages to international carriers.