Public sector Videsh Sanchar Nigam Limted (VSNL) is embarking on an ambitious expansion plan with investment target of over Rs 4,200 crore during the Ninth Plan to become a world class telecom service provider.

The corporation, one of the `Navratnas' chosen to become global giants by the government, will channalise its investments over the next five years mainly for expanding transmission and switching capacity besides gearing up for futuristic services provision.

"VSNL does not expect these investment plans to be modified in any material way by the Navratns proposals of the government", B K Syngal, chairman and managing director of VSNL, which has been given total financial and functional autonomy, told PTI.

Asked about the progress of the $ 500 million joint venture project with British Telecom (BT) for setting up a regional telecom hub, he said though it was still under discussion, "the new freedoms granted to navratnas could `theoretically' allow VSNL to proceed anyway."

Dubbed "oasis", the BT-VSNL project has been hanging fire for the last one and a half years with the telecom secretary, M A V Gokak, earlier saying that the government is "neither accepting nor rejecting the project proposal".

Enthused by the new autonomy package aimed at making the corporation a global giant, Syngal was working on a plan to position VSNL to "provide international telecommunications services and facilities outside India."

Besides operating in the international telecom arena, the corporation also intends to participate significantly in an increasingly liberalised Indian telecom industry, Syngal said.

"VSNL would assist in the development of the domestic Indian telecommuications network", he added.

Stating that VSNL would provide additional "value-added and higher margin" services in the near future, he said the corporation plans to participate in joint ventures with international telecom companies for this purpose.

As such, the US magazine `Data Communicationa' had ranked VSNL among the world's best telecom companies, Syngal said, adding that the corporations' recent global depository receipt issue was oversubscribed four times to garner over $ 526 million through investors in 28 countries.

The company plans to invest Rs 2,050 crore in expansion of transmission capacity, Rs 895 crore in expansion of switching capacity, Syngal said, adding that Rs 1,265 was earmarked for providing new facilities which included mobile satellite services, internet access and managed data networks.

VSNL has already invested about Rs 110 crore in the flag (fibre-optic link around the globe) submarine cable linking India to Japan and United Kingdom, which is 90 per cent complete, Syngal said.

The sea-me-we 3 submarine optical fibre cable project (South East Asia-Middle East-western Europe), which is now underway, envisages an investment of Rs 1,925 crore, he said.

He added that new digital switches had been commissioned at Mumbai, Delhi, Chennai and Calcutta, while new gateways were being built at Bangalore, Ernakulam, Jallander and Kanpur.

A new gateway was also planned at Hyderabad, and a satellite access node (SAN) for Ico global mobile satellite system was being established at Delhi, he said.

Referring to the `vision statement' of VSNL, Syngal said that it was committed "to creating a global and seamless network of information superhighways; to connecting people and computers cost-effectively and efficiently, anytime, anywhere".

Referring to the `oasis' venture, the VSNL chief emphasised that the `Indian' element of the shareholding would be kept to a `minimum' of 51 per cent, even though the telecom PSU and the foreign partner might have equal equity holding.

While VSNL claims that "to date, the composition of the partners and their shareholdings have not been finalised," but sources said Infrastructure Leasing and Financial Services (IL&FS) and Marubeni of Japan could join in the venture. Gokak had earlier said that the government would not want to dilute its monopoly in the domestic long distance services at least till 1999, when a `review' is scheduled, and the proposed joint venture would be examined in this light.

He, nevertheless, said that strategic alliances were not open to the bidding route even as criticism was being voiced over the selection of British Telecom as a `strategic partner' for VSNL without a formal bidding process.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.