According to unaudited annual results released by the company on Thursday, total revenue increased by 21.01 per cent to Rs 6,395.90 crore from Rs 5,285.30 crore. Total expenditure went up from Rs 4,437.60 crore to Rs 5,033.20 crore, an 13.42 per cent increase.

The result was received well by the markets with the scrip gaining Rs 24 during the day. On the Bombay Stock Exchange, the scrip opened at Rs 826, touched a low of Rs 825 and closed at the day's high of Rs 850.

While income from operations went up by 17.63 per cent to Rs 6,129.70 crore from Rs 5,210.60 crore, other income shot up by a whopping 256.22 per cent to Rs 266.10 crore from Rs 74.70 crore. This, according to the company, is a direct fallout of the sharp depreciation of the rupee during the year.

VSNL's volume of telephone traffic during the yearincreased by a healthy 21.23 per cent to 167.90 crore paid-minutes from 138.50 crore paid-minutes a year ago. Net revenue per minute increased from Rs 9.96 to Rs 10.26. At the same time, its incoming to outgoing call-ratio increased from 2.60 to 2.98, thus, increasing the pressure on VSNL to reduce settlement rates with other international carriers.

Basic telephony continued to account for about 95 per cent of VSNL's income, while specialised services made up for the rest. Revenues from value-added services increased by 64.16 per cent to Rs 270.7 crore.

Of the value-added services, Internet services showed the maximum growth of 235 per cent with income from this increasing from Rs 17.70 crore to Rs 59.30 crore. This despite tariff rate for the service coming down from Rs 15,000 for 500 hours to Rs 10,000 for 500 hours. VSNL expects to double the number of Internet subscribers to two lakh between now and the end of the current fiscal.

According to chairman and managing director BK Syngal, VSNL ispreparing itself to face competition when its monopoly on international telephony comes up for review in 2004. "As telephony becomes a commodity from a service, the pressure to reduce cost to the customer is increasing," he said.

In addition to preparing itself for competition, the company also plans to enter into the domestic long-distance services market, currently a monopoly of the Department of Telecommunications (DoT). DoT's monopoly in the market will be up for review next year when it is expected to be opened up for private competition. "There is a great opportunity to enter the domestic long-distance market and we will do so at the appropriate time," said Syngal.

Further, the company plans to initiate a brand creation and awareness programme for its VSNL brand. It also proposes to set up two additional international gateways and seven more satellite earth stations in the country by 2002.

Draws up $1.4bn investment plans

Videsh Sanchar Nigam Ltd (VSNL) has drawn up an ambitious$1.4-billion investment programme till 2002, to be part-funded through GDRs, internal accruals and debt. While $229 million will be invested in 1998, the amount will increase to $386 million during 1999. Another $288 million is expected to be invested during 2000 with $297 million in 2001 and the rest in the year 2002.

According to the company, 40 per cent of the money will be invested in improving and creating new transmission systems that will not only improve its present services but also help it entering new areas like domestic long-distance services.

Another 17.6 per cent will be invested in switching systems, while 6.9 per cent is proposed to be invested in value-added services. Strategic investments will make up 8 per cent of the money, while the rest will be invested in other areas.