VSNL zeros in on traffic and volumes

NEW DELHI: Bogged down by falling termination charges and settlement rates, VSNL in a bid to gain access to end user customers is looking at calling cards as the way forward. This will help VSNL acquire more volumes. In fact, during fiscal 2004, the company plans to focus on traffic and volumes, disclosed N. Srinath, director operations, VSNL during an analyst meet held on Thursday.

During the financial year ended March 31, 2003, the company reported a net profit of Rs 780 crore against Rs 1,407 crore in the year ended March 31, 2002. Total income during the year dipped to Rs 4,812 crore from Rs 7089 crore in fiscal 2002.

For the fourth quarter ended March 31, 2003, the company reported a net profit of Rs 191 crore, against Rs 316 crore in the corresponding quarter ended March 31, 2002. Total income in the quarter under review was Rs 1,038 crore, compared to Rs 1,776 crore in the corresponding quarter last year.

The past year has seen significant changes in the telecom industry and in particular, the International Long Distance (ILD) sector, which witnessed liberalization with effect from April 1, 2002, company officials said.

The year that followed has seen sharp decline in international settlement rates and domestic tariffs, all of which are developments favorable to the end customer, it added. VSNL has, despite competition, maintained and grown its traffic volume and is certain that the future growth in volumes will offset the short-term impact on the industry, added N. Srinath.

The contribution of data and other value added services to VSNL`s revenues during the year has increased from 11 per cent in fiscal 2002 to 25 per cent in this financial year. The same is on account of the company`s focused sales and marketing endeavors to tap the demand for these services, said Srinath.

S.K. Gupta, managing director, VSNL said, `As VSNL consolidates its presence in the retail market, the company is also proactively seeking to tap the opportunities in the corporate market segment for its Value Added Service. Customer service is also becoming a key differentiator for VSNL as we are gearing ourselves to offer our customers superior products, coupled with quality customer service. The company is also looking at cutting costs through the optimum utilization of bandwidth, which constitutes a sizable share of VSNL`s operating expenses.`

The board of directors of VSNL has recommended a final dividend of Rs 8.50 per share for the year ended March 31, 2003.

Replying to analyst on a low dividend payout , Gupta said that the company may need the cash on hand, which is close to Rs 2000 crore for its expansion plans. The company has applied for an ILD licence in Sri Lanka which it expects to receive sometime soon and also its joint venture in Nepal is expected to roll out services soon. Moreover, the company is also looking to increase its presence overseas as and when the opportunity arises Gupta said.