Said Shailendra Kumar Gupta, the company's chairman and managing director: "It (NLD) is an exciting market and one with tremendous growth potential." This will be over and above the capex of Rs 4,643 crore originally envisaged for the five-year period ending March 2002 and will go towards setting up gateways and earth stations.

The company unveiled its future growth plan to the shareholders at its 14th annual general meeting here on Tuesday. It was also revealed that as part of the capex, the company would also be investing Rs 2,000 crore over the next two years. Significantly, the original capex was Rs 7,600 crore. "We dropped a few projects", said RSP Sinha, director (finance). The company has so far spent Rs 1,800 crore.

Work has also started on VSSL, a subsidiary which is to be spun off and listed as a separate company. Asked about details, Mr Gupta said: "Separating assets (of the two entities) wil not be easy. We'll also see that we do not end up creating a rival for ourselves."

The investments are aimed at improving the capacity of international telecom services, and increasing the number of international circuits, commissioning a wholly-owned, low-cost, fully-integrated digital network across the country. This will include installing asynchronous transfer mode (ATM) switches for more efficient transmission of voice and broadband data.

The project will also allow VSNL to diversify into high-growth areas including Internet, direct-to-home (DTH) television and multimedia services. Also high on the company's agenda is offering voice services over the Internet, when permitted.

The company is expanding and upgrading its infrastructure to provide bandwidth for these services. Also on the cards is acquisition of interests in undersea fibre optic cables and satellite transmission capacity.

Describing the company's strategy as one of anticipating change and taking advantage of the opportunities that it throws up, Mr Gupta said: "We will continue to look at synergistic growth opportunites." The idea is to fast transform itself into an integrated information support services provider by focusing more aggressively on Internet and value-aded services.

Quite in line with the global trend, VSNL sees these services contributing significantly to its future growth and profitability. It is also keenly awaiting an all-India ISP license which would allow it to expand its customer base further.

But what might turn out to be the real dampner for VSNL are the issues of autonomy (the goveernment still holds as much as 52.9 per cent in it) and employee compensation.

"How do you think you'll compete with the private sector which pays its employees ten times more than you do?" Mr Gupta asked and spoke about a profit-sharing mechanism for the employees, but how far and how quickly he will be able to do it is anybody's guess.

Sources said that was some way off. The company ended the year 1999-2000 with a total revenue of Rs 72.31 crore, a modest growth of 0.77 per cent over Rs 71.76 crore last year. Profit before tax at Rs 8.40 crore was considerably lower too (Rs 13.25 crore). This, the company officials said, was due to the writing down of its investment in ICO Global Communications worth Rs 513 crore. Box: Investment plans Rs 231 crore on additional 600 numbers of 2 mb circuits 2.Rs 80 crore on installing and commissioning ATM superhighway gateways 3. Rs 50 crore on setting up Integrated Network management System. 4. Rs 50 crore on VoiP technology, whren permitted.