Bulk of the investment will be used for major projects being implemented, which include the SEA-ME-WE3 (South East Asia-Middle East-Western Europe 3) optical-fibre cable system, a network-management centre, additional earth stations, an ATM (Asynchronous Transfer Mode) network and value-added services.

Addressing shareholders, Kumar said the capital expenditure is aimed at developing basic international-telephony business as well as specialised and value-added services.

"A decision on the transit services joint venture and regional-hub project is expected soon. Also in the offing is a joint venture for mobile-satellite services and a subsidiary for value-added services," Kumar said.

Kumar informed shareholders that VSNL has planned for a capital expenditure of Rs5,031 crore for the ninth plan period, of which Rs 447 crore has already been invested in various projects in 1997-98.

During 1997-98, VSNL's revenues increased by 22 per cent to Rs 6,436 crore and its net profit jumped 92 per cent to Rs 968 crore. It also recorded a growth of 21.63 per cent in its telephone traffic which increased to 168.5 crore minutes. "We believe that growth in volume of traffic to VSNL would have been higher at 25-26 per cent under normal business conditions," said Kumar.

"VSNL continued to implement an aggressive strategy for growth in infrastructure which will help the company become a strong and efficient player in telecom," said Kumar. During 1997-98, VSNL commissioned two additional international gateways at Ernakulam and Jallandhar, set up the FLAG cable, which connects India to 40 countries from the Far East to Western Europe, commissioned two video-uplinking facilities for data and value-added services and an earth station at the Information Technology Park,Bangalore.

Besides, VSNL has invested an estimated $150 million in ICO Global Communications, becoming the second largest stakeholder in the satellite-based hand-held personal communication services company.