The Hindu Business Line : VSNL plans Rs 1,000-cr capex for current year

Videsh Sanchar Nigam Ltd (VSNL) will spend Rs 1,000 crore as capital expenditure in the current year. It could spend an additional Rs 1,000 crore depending on the way its retail broadband business takes off.

"We have aggressive plans for retail broadband and, depending on how this pans out, we could invest anywhere around Rs 1,000 crore more," said Mr Rajiv Dhar, Chief Financial Officer, on Wednesday. The company currently has over one lakh retail broadband customers.

The initial capital expenditure of Rs 1,000 crore will chiefly go towards increasing the company's national long-distance (NLD) backbone, he said. The company's 250 points of interconnect (PoIs) will be doubled this year. This will have a positive impact on the company's NLD business and also bring its operating costs down, by reducing dependence on leased networks, he said.

VSNL's revenues would be around Rs 9,500 crore this financial year, keeping in mind the income from its new acquisitions — Tyco Global Network and Teleglobe International, now incorporated into VSNL Singapore.

These companies were incorporated into VSNL in July last year and February this year; so only part of their full-year earnings came to VSNL during the previous financial year.

Out of the $2.1 billion revenues, $1.1 billion would come from voice, around $650 million from data and related services, and the rest from other services, said Mr Dhar. Though VSNL's international businesses reported a net loss this year, its earnings before interest, tax, depreciation and amortisation will become positive by the third or fourth quarter of the current year, and it will post net profit by 2007-08, he said.

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