How do you look at communication changing over the next few years?
Over a period of time, convergence is bound to happen. With broadband,gradually single-point communication will replace the multiple-point that wehave today.

What do you see VSNL doing five years from now?
I'm quite optimistic about VSNL, given its performance, strengths in termsof dedicated manpower and infrastructure. We'll be an all-India Internetplayer. We'll also be into e-commerce and advertising on the Net in a bigway either on our own or through partnership. We'll continue to be the keybandwidth provider to all ISPs.

But there would be challenges as well? And how do you intend meetingthem?
Yes, we have pin-pointed a few. In telephony, our core business, thepossibility of data business overtaking voice. Secondly, it is the issue ofour monopoly which is ending. And third, Internet telephony if and when itbecomes a qualitative reality (quality is very bad as of now). Since we arealready into data (business) all we'd need to do is scale up operations whenit comes to that. We can take care of the monopoly issue by going in fortie-ups either with a domestic or a foreign carrier like AT&T, MCI orSingapore Telecom whichever gives us the strategic advantage. Internettelephony doesn't bother us much. For, one, I don't see Internet telephonyreplacing voice telephony in the next 2-3 years given its poor quality. Andtwo, if at all it does, we'll benefit the most because of our largestsubscriber base.

What are the opportunities for you?
Our existing business is one for sure. We'll consolidate it further byinstalling more sophisticated equipment. Domestic long-distance, all-IndiaISP would be another. We are keeping our eyes open. We'd also be interestedin the cellular business.

What about basic telephony?
We'd certainly not like to be in conventional basic telephony which involvesunderground cabling right up to customers' premises. We'd be comfortablewith things wireless, even the last mile if it is wireless. Optical fibrecable (OFC) is fine by us as long as it is for bulk use (NLD for instance).Moreover, we would not like to duplicate what DoT is doing. In a nutshell,we'd do anything which we can using existing assets with slightmodifications.

Is cellular your immediate priority? If yes, can you spell out yourconcrete plan?
We do not have any concrete plans as of now. We'd like to move gradually.Our priority is consolidating our core business and NLD. In fact, NLD mighttake precedence over the former as we have still got time for it. But we dofeel we'll have no problem handling it. It is just a question of managingcentres, setting up base stations.

Can you elaborate on how you would go about investing the Rs 1,500 crorethat has been set aside for NLD?
It will be over a period of seven years. As per the government, we canincrease the expenditure 10-15 per cent every year. The investment would bein infrastructure in the form of trunk automatic exchanges andinterconnecting media. We already have satellite, so we'd be laying a goodamount of OFC network. We do not see much business sense in laying anall-India network. We'd lay some and swap capacities with other playerspaying OFC on different routes. We think sharing is a good option. Thiswould save us a lot of laying effort too.

How would you consolidate your core business?
We'd go in for tie-ups with one or more international carriers. We need toaugment our infrastructure to handle more volumes in future.

What do you have to say to those people who tend to question VSNL'sability to strike alliances with a speed that is required today?
Yes, I think that's a point. But I hope we'd be able to operate at the samespeed and that soon we'll have the flexibility too. We are in active talkswith various players for Internet tie-ups.

What is your expectation from NLD?
The NLD market is worth Rs 130 billion. But since the intra-circle (Rs 60billion) has not been opened, the effective market size is worth Rs 70-75billion. I'd be quite happy with a 15-20 per cent share of the NLD in thenext 3-4 years.

The threat of poaching (of talent) seems to be looking straight intoVSNL's eyes. Are you worried?
I am not unduly worried over the issue. In the last two years, we haven'tlost too many people. Our employee turnover is in line with the industryaverage. Unlike the private players (read poachers), we have the ability totrain and develop talent in-house. Anyway, we hope share in the profit andemployee stock option plan would prove to be good incentives for ouremployees.