VSNL net dips 28.5% in Q1

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

quarter.