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Friday, Jun 28, 2002

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WorldCom scandal to hit Indian operations

Ambarish Mukherjee

NEW DELHI, June 27

AFTER the Enron episode which still continues to haunt Indian policy planners, the $3.8-billion (approximately Rs 18,240 crore) WorldCom accounting scandal unearthed in the US on Wednesday is likely to seriously impact the group's operations in India.

The company had signed a crucial memorandum of understanding (MoU) with VSNL, the only international long distance provider in the country, for frame relay service. Industry sources are apprehensive that long-distance telephone calls from India on certain international routes that are operated with support from WorldCom systems may also get affected.

Simultaneously, the incident would also take its toll on the company's plan to set up a manufacturing base in Indiaduring the current year as had been finalised earlier, sources familiar with the company's operations said.

Also, the functioning of another WorldCom group company — UUNET — the single largest Internet backbone service provider in the world, which had entered into a strategic alliance with the Delhi-based information technology company, DelhiNet Web Services Private Ltd, may be adversely hit, industry sources reckon.

WorldCom has a substantial presence in the Indian telecom sector through its wholly-owned subsidiary, MCI WorldCom India Private Ltd.

It is a partner of VSNL for providing frame relay services for voice and data in India and the US through which long distance calls to the US and Canada from India are routed. In February this year, the company had also bagged an approval from the Central Government for manufacture, distribution, marketing and sale of calling cards and distribution, marketing and sale of personal identification numbers (PINs) for use outside India.

The company's India Country Head, Mr Deepak Maira, when contacted by Business Line, declined to comment, but stated that the company's Hong Kong office would be able to deliberate on the issue.

The company's spokesperson for Indian and South Asian operations, Ms Lowena Kwok, when contacted in Hong Kong, was not available for comment.

However, a spokesperson on behalf of Citagate Delwee Rogerson, the Hong Kong-based public relation firm handling WorldCom account, told that the company would not like to make any specific comments about its Indian operations.

The company is also permitted to provide consultancy and management services for the installation and maintenance of end-to-end private circuit capacities in the country and was playing an advisor to several leading telecom companies in the country.

The Indian subsidiary currently has a paid-up capital of Rs 4 crore and employs around 200 persons, but the exact employee strength couldn't be ascertained as company officials preferred to remain tight-lipped to every query.

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