VSNL net dips 28.5% in Q1

By : |July 30, 2002 0

NEW DELHI: Videsh Sanchar Nigam Ltd.’s revenue for the first quarter of
2002 dropped by 13 percent as it clocked a total income of Rs 1,424 crore in the
AMJ quarter as compared to Rs 1,642.1 posted during a year ago. This was
announced by the company with the release of its un-audited financial results
for the 1st quarter ended June 2002. Net Profit fell down from Rs 365 crore in
Q1 2001 to Rs 261 in Q1 2002.

Other highlights of the result include Q-1 income from operations was
reported at Rs 1,373 crore as compared to Rs 1,528 crore for the corresponding
quarter in the previous year, a decline of 10.16%. The ILD traffic in minutes
for the quarter ended June 2002 is at 878.85 million minutes as compared to
709.73 million minutes for the corresponding period, an increase of 23.83 %.
Internet subscriber base grew by 11.71% during the quarter from 5.56 lakh as on
30.06.2001 to 6.21 lakh as on 30.06.2002.

Other income is at Rs 55 crore as compared to Rs 113 crore for the
corresponding quarter in the previous year. The decline in other income is
attributable to reduced foreign exchange earnings on account of lesser
depreciation of the rupee and decline in interest income. Profit before tax for
the quarter ended June 2002 is at Rs 396 crore as compared to Rs 501 crore for
the corresponding quarter in the previous year.

VSNL attributes the decline to the internationally prevailing phenomenon of
drop in settlement rates coupled with decline in ILD tariff, pressure on
interconnect charges and lower other income. The company is in the process of
negotiating arrangements with major domestic telecom operators for revenue
sharing. Pending final agreements income from operations as well as transmission
costs included under “Network Costs” have been accounted for based on
the same ratio of revenue sharing as at the end of financial year 2001-02.

On conclusion of the negotiations, the figures would be adjusted accordingly
and may have significant adverse impact on the results. In a move to diversify
across the spectrum of voice and data services and become and integrated player
in both ILD as well as NLD, the company has announced the commencement of its
backbone rollout for NLD, which will be ready for launch during the next

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