Financial Daily from THE HINDU group of publications
Friday, Jul 26, 2002
VSNL revenues from telephony down Rs 736 cr
NEW DELHI, July 25
VIDESH Sanchar Nigam Ltd (VSNL), the international long distance operator, has suffered a decline of Rs 736 crore in call revenues at Rs 5,766 crore during fiscal 2001-02 as against Rs 6,502 crore earned during the previous year.
As per the audited financial accounts of the company which are to be presented at the company's annual general meeting on August 20, this decline has taken place despite a healthy growth of 16 per cent in telephone paid minutes at 3,120 million as against 2,688 million in 2000-01.
The slump in revenue has been attributed largely to the declining settlement rates reached with foreign telecommunication administrations, coupled with the reversal in the outgoing-incoming call ratio, which is only expected to accentuate further with the sharp fall in ISD tariffs.
As per the accounts, the revenue from foreign administrators for all incoming calls declined to Rs 4,150 crore from Rs 4,667 crore in the previous year, even as VSNL had to pay Rs 1,072 crore (against Rs 1,386 crore) to them for outgoing calls.
Similarly, for all outgoing calls, BSNL paid VSNL Rs 1,615 crore as compared to Rs 1,834 crore in the previous year and, in turn, received Rs 2,305 crore (against Rs 2,734 crore) for all incoming calls.
Further, revenue from the US was down at Rs 1,944 crore (against Rs 2,330 crore) , from the UAE at Rs 672 crore (Rs 722 crore), Saudi Arabia at Rs 380 crore (Rs 418 crore), the UK at Rs 209 crore (Rs 293 crore), Canada Rs 196 crore (Rs 70 crore) and other countries together at Rs 751 crore (Rs 1,523 crore).
Typically, VSNL's call revenue can be divided into two sections. First is the revenue from incoming international calls and the second is the revenue on account of outgoing international calls.
All international calls made from within the country, are handed over to VSNL by the basic operator (BSNL), which, in turn, passes it onwards to the foreign carriers for delivery to the destination country.
For this service, BSNL pays VSNL a portion of the revenue charged from its subscribers. However, VSNL also has to pay the foreign carriers a "settlement" rate for further transmission of the call.
The settlement rate is usually half the price charged from the subscriber.
Thus, for each outgoing international call, BSNL bills the caller some collection charge, shares a portion of it with VSNL, which, in turn, pays a settlement rate to the foreign terminating carrier.
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