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VSNL net profit rises by 56.84 per cent

VSNL Chairman and Managing Director B K Syngal told reporters that his company recognises the need to reduce the settlement rates but favours a gradual reduction.

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He said VSNL has challenged the FCC statement on reduction of settlement rates as India is a sovereign country and is not bound to accept any law framed unilaterally by the FCC, the US telecom body.

Syngal claimed VSNL, the exclusive provider of public international telecommunications services in India, has posted excellent financial results for the first half of 1997-98 ending September 30. The company has recorded strong volume, revenue and profit growth.

Presenting the company's interim results for the first half of the year, he said the total revenue of the company increased by 22.89 per cent to Rs 30.78 billion from Rs 25.05 billion in the corresponding period last year.

Net profit increased by 56.84 per cent to Rs 4.15 billion from Rs 2.64 billion in corresponding period last year.

The annualised earning per share has also increased by 32 per cent from Rs 66.2 to Rs 87.43 on an expanded equity share capital after the company's global depository receipt issue including the over allotment option.

The business of the company continues to show strong overall performance. The main factor, which influenced growth, was the total volume of telephone traffic transmitted over the company's network. This has risen by 24.19 per cent from 645 million to 801 million paid minutes for the six months ended September 1997 compared with the corresponding period last year and 1,385 million paid minutes for the entire year ended March 31, 1997, he said.

Syngal said basic telephone services continue to remain the substantial contributor to the company's revenue and profits.

For this period, basic telephone services contribute 94 per cent of the company's revenues with specialised services making up the remainder.

He said the company plans to invest $16 million in additional digital microwave links between satellite earth stations and its gateways to cater to the increase in leased lines and additional bandwidth requirements of software technology parks.

The installation is likely to be completed by mid-1998. The work on the setting up of the Iridium gateway has commenced and is scheduled to be ready for testing by the end of fiscal 1998.

Installation of a standard B-Earth station at the information technology park at Bangalore is at an advanced stage and is expected to be completed by January 1998, he said.

Tenders have already been received from seven international players. A decision on the selection of the partner would be announced shortly, he added.

UNI

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