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VSNL earmarks Rs 2,000 cr for capital expenses

Our Bureau

MUMBAI, April 30

VIDESH Sanchar Nigam Ltd (VSNL) has marked out a capital expenditure of Rs 2,000 crore for 2001-02 which will be broadly allocated among it's direct-to-home (DTH) and domestic long-distance (DLD) projects as well as acquisition of extra bandwidth among o ther areas.

``VSNL's DTH project will see an investment of Rs 500 crore for the first year of operation while Rs 600-700 crore will go towards its recent acquisition of one giga bit of bandwidth,'' said Mr S.K Gupta, CMD, VSNL, at an analysts' meet held here. ``We a lso plan to cover 25 per cent of the DLD project's investment cost within this year.''

The rest of the expenditure will be directed towards other developmental projects and the ISP business which VSNL plans to expand from the current nine cities to another 12 by the end of 2001.

Speaking about VSNL's DTH foray, Mr Gupta said, ``A DTH project requires an aggregation platform, a tie-up with a satellite service provider and content provider, and equipments on the consumer's side. VSNL is already in the uplinking business and only n eeds to tie up with a satellite service provider. To this extent, we are holding dialogues with satellite giants for an alliance and have already decided upon Delhi as the platform.''

Mr Amitabh Kumar, Chief Operating Officer, VSNL, added, ``We have all the technologies for broadcasting, the only thing needed is an alliance for satellite services.''

According to him, for the first year of operations, the DTH project will require an investment of Rs 100 crore on the ground and Rs 400 crore for customer boxes. ``We are targeting one lakh subscribers for the first year but it could be more depending on the quality of service we provide.''

Replying to queries about VSNL's DLD licence, Mr Gupta said, ``We are currently in the process of working out a specific date for application of the licence so that we do not default on our roll-out plans.''

VSNL had been offered a free DLD licence in exchange for ending it's monopoly over international traffic two years ahead of schedule in April 2002.

Asked if application for the DLD licence was delayed due to differences over the compensation package offered by the Government, Mr Gupta said, ``The compensation package we have been offered is an interim one and can be reviewed any time. We fully inten d to enter the DLD market space, only the implementation date has to be decided upon.''