Financial Daily from THE HINDU group of publications
Friday, Sep 03, 2004
Financial Daily from THE HINDU group of publications Friday, Sep 03, 2004 |
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Telecommunications Info-Tech - Telecommunications International telephony — VSNL to seek compensation from Govt for early loss of monopoly Our Bureau
Mr Ratan Tata, Chairman, VSNL, with Mr S.K. Gupta, Managing Director, at the company's AGM in Mumbai on Thursday. -- Paul Noronha
Mumbai , Sept. 2 VIDESH Sanchar Nigam Ltd is chasing a lot of money that the company feels is due to it. For starters, it is still pursuing the issue of compensation (for early loss of monopoly in international telephony) - with the Government. "The company has got valuations done. The finance and law ministers of the previous government had agreed that the subject of compensation could be referred to arbitration," said Mr Ratan Tata, Chairman of the company. "We are now in the process of following it up with the new Government," said Mr Tata. The company is also owed between $80 million and $100 million by international carriers by way of dues, said the Chief Financial Officer, Mr Amitabh Khanna. Around $8 million to $10 million will be received during the current financial quarter, he said. The company's investment in 2.6 per cent in New Sky Satellite amounted to Rs 56 crore. "We hope we can get Rs 120 crore when we sell that," said Mr Tata. The sale of VSNL's share in Intelsat would also get over Rs 700 crore. "Some share of the proceeds will be used by the company for projects and for expansion," said Mr Tata. He said that it would take three to four years for the company to reinvent itself. The decline in international telephony tariffs and dependence on this business would slowly reduce, he said. "We should almost view this as a new company, starting from scratch," he said. The demerger of surplus lands owned by VSNL is proving to be a legal problem, he said. "Who will bear the stamp duty and capital gains tax, it would not be fair if we have to," he said. The matter of issuing the Government one golden share for their 26 per cent stake would also be pursued, he said. The earlier Government had said that three or four items regarding it were important to them, and this VSNL had agreed to. "Now we have to talk again," said Mr Tata. The issue of retirement of Mr S.K. Gupta, whose two-year extension after attaining the age of 60 has ended, would be put before the board of the company, he said. Broadband is to be the future activity of VSNL. "We expect that revenues from broadband over time would amount to Rs 350 crore." He did not specify the period of time over which this would happen. In a year or two, the company's broadband service will be available in 30 cities, and would be available in the prepaid mode, he said. A major portion of the company's investment plan of Rs 2,000 crore for the current year would go towards the development of broadband. VSNL's international undersea cable connecting India and Singapore would be operational in a few weeks' time. The company's UK outfit would be able to get an international telephony licence soon, following in the footsteps of VSNL America Inc, said a senior official. This would be followed by one in Europe.
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