Vsnl To Enter Domestic Telecom Market

Videsh Sanchar Nigam Limited (VSNL), the country's international carrier, is all set to enter the domestic telecom services market, till now a turf of the department of telecommunications (DoT)

The Rs 5,200-crore carrier has already signed memoranda of understanding with local agents in four cities _ Chandigarh, Sachin and Surat in Gujarat and Indore in Madhya Pradesh. It plans "several more" such agreements within a year.

Legally, these MoUs are yet to take the form of corporate joint ventures. But, experts say, the alliances will be structured to face competition as stand-alone companies. VSNL may also take over earth-stations owned by state governments in software technology parks, insiders say. Case in point: the earth station at the Technopark in Thiruvanathapuram, Kerala.

The nature and scope of VSNL's alliances with local agents currently focus on international leased circuits for data connectivity and Internet connections. In Punjab, VSNL has signed an MoU with the Punjab Communications Ltd (Puncom) to provide international private leased circuits, leased and dial-up Internet connections and other value-added services. Intially available in Chandigarh, the service is to be extended to Ludhiana, Phagwara, Gobhidgarh and other areas.

In Indore, the carrier plans to set up an earth station to provide high-speed international telecom services for point-to-point voice, data and video conference facilities to exporters of the STP. Here it has tied up with the Madhya Pradesh State Electronics Development Corporation Ltd.

The earth station is to be set up in collaboration with Optel which, in turn, will provide the land, power and telecom connectivity besides constructing the earth station building. The Rs 12-crore project is to be completed in six months. VSNL has similar earth stations elsewhere in the country, projects which it is implementing on its own.

In Gujarat, VSNL has entered into an agreement with the Diamond and Gem Development Corporation to provide high-speed data international communications in a free trade zone covering Surat, Sachin and neighbouring areas.

Besides, the carrier has a presence in 10 cities with its Internet nodes.

It has more than 120,000 subscribers to its Internet access service spread across Delhi, Mumbai, Pune, Ahmedabad, Dehradun, Bangalore, Mysore, Ernakulam, Chennai, Thiruvanathapuram and Calcutta. The service already accrues the carrier some Rs 75-100 crore.

VSNL also plans to be an Internet service provider (ISP) under the newly-announced Internet policy of the government. The number of cities to be added to its Internet service are scheduled to grow. It is also implementing a two megabits per second national Internet backbone.

According to official estimates, by fiscal 2005, VSNL will have total revenues of some Rs 30,000 crore, marginally less than DoT's expected Rs 45,000 crore.