VSNL recovers Gemplex buyout cost via orders

Videsh Sanchar Nigam Ltd (VSNL) has recovered the acquisition cost of the US-based Gemplex by bagging orders worth around Rs 45 crore from information technology enabled services (ITES) clients using the IP-VPN (International Internet Protocol Virtual Private Network) for their voice and data needs.

VSNL acquired IP-VPN assets of Gemplex in July 2003. However, the integration and adaptability of the network started only in August 2003 and the network was commercially deployed in December 2003.

VSNL sources confirmed that "the company has bagged orders, which are worth thrice the acquisition cost of the network, within 4 months of commercial deployment. With the growing demand of IP-VPN solutions, it is expected that the IP-VPN segment may continue to see a similar growth rate for the remaining 8 months of this calendar year".

Following the deflation in the ILD voice business, VSNL has been exploring new businesses. The IP-VPN network is believed to be a focus area, among others, for the international operations of the company in the near future.

Apart from selling capacity on the IP-VPN network to external parties, the company will also be deploying a part of the capacity to enhance its own product portfolio.

The company plans to offer a triple-play broadband product offering by end of this calendar year and this IP-VPN network can be deployed to transmit high quality video. The IP-VPN business segment offers an annual revenue potential of Rs. 400 crore in the next 3-4 years, according to industry sources.

VSNL is also considering to offer video-on-fibre to the US and Europe, which are likely to see an exponential growth in 1-2 years. The company is, at present, carrying outbound traffic from India but is expected to carry inbound traffic in the near future.