'We will invest $1 bn in SNO Telecommunications'
Hindustan Times — May 3, 2006

From its overt dependence on international long distance (ILD) revenues four years back to re-engineering its business model, VSNL is looking to grow through acquisitions and focus on newer areas such as managed services and acting as a back office for telecom operators globally. N Srinath, executive director of VSNL and a recent winner of Telecom Asia's CEO Of The Year Award spoke to Venkatesh Ganesh about the company's plan for the future.

There is a lot of talk on your South African foray. Can you explain in which areas do you operate there?
We got a licence for operating in the fixed line telecom services in December 2005. VSNL owns a 26 per cent stake in SNO, a South African telecom service provider. Now, we are ready to launch our fixed line telecom services by June-July 2006. The project work is on and we hope to start as per schedule. Along with local companies, we will invest $1 billion in SNO Telecommunications over the next four years. The project cost would be met with a mix of debt and equity. We have a licence to provide all but mobile telecom services in South Africa.

Will this foray include TCS coming in certain areas such as application or network maintenance work?
We are looking at TCS not only doing some work in conjunction with us for South Africa but across all geographies. This synergy will enable us to be cost competitive and even give an opportunity to provide value-added services rather than the run-of-the-mill maintenance or support of networks. Also, we would be able to leverage TCS' relationship with the Fortune 500 companies and push the message that telecom companies can make India their back office for all services. This would also allow us to offer a complete range of solutions leveraging TCS' and our capabilities to the fullest.

You seem to be losing marketshare in the ISP business according to Trai. Your comments.
We do not agree entirely. The trend that we witness is a shift towards broadband and we have one lakh subscribers. Also, we believe that beyond the Indian numbers, there is a bigger story over seas. If you look at our voice traffic, we have recorded voice traffic of 16 billion minutes across the world. The model has been designed in such a way that our revenues will come from not just India centric calls but cross-country calls too.

Now, we can service a call made from the US and terminated at Singapore as we have landing points across 230 countries due to our Teleglobe acquisition. This has given us access to 1,400 customers and carries over 13 billion minutes of voice traffic globally in addition to our three billion minutes per year. The scenario has changed since the last mile connectivity still exists with MTNL and BSNL. We are in the process of re-inventing ourselves through overseas acquisitions, introducing new products and services, tapping into new market segments and attaining global scale.