In a recent interview, Srinivasa Addepalli, vice-president, corporate strategy, Videsh Sanchar Nigam Limited (VSNL) talked about the company’s achievements and emerging opportunities. Excerpts:
What have been VSNL’s key achievements in the last one year?
VSNL has joined the $2 billion club by clocking record revenues of Rs 88.57 billion under Indian GAAP on a consolidated basis for the year ended March 31, 2007. The company’s revenues reflect the first full year of accounts consolidation after the acquisition of Teleglobe, and over 50 per cent of its revenues now come from international operations. Riding on the back of this acquisition, VSNL has also emerged as one of the largest global wholesale voice players carrying around 20 billion minutes of international voice traffic.
What are the likely opportunity areas for VSNL and what are the challenges in meeting them?
A key opportunity for VSNL is to offer managed services to large and medium enterprises. This will enable it to move from being a provider of connectivity services to a provider of complex solutions that bundle networking and IT. There are also emerging opportunities in network operations and management outsourcing by global carriers and MNCs. VSNL, with its expertise in managing a global transmission and IP network, is uniquely placed to service this opportunity.
The company also sees a huge opportunity in extending the reach of its data and internet services to enterprise and retail broadband customers using wireless technologies like Wi-Fi and WiMax. VSNL has already launched WiMax services for enterprise customers in Bangalore and is targeting a pan-Indian rollout spread over 120 cities/towns in the current financial year.
VSNL is strengthening its existing global infrastructure by investing in submarine cable systems ?? one linking India with Europe, and the other intra-Asia. The company has a capital expenditure programme of around $500 million in 200708 for its expansion projects, including the new cable systems, upgradation of existing ones, upgradation of its data centres and the launch of Wi-Max services.
What are the company’s priorities in the long and short term?
The company’s priority in the short term is to execute expansion projects and launch new services. Achieving globally benchmarked customer experience standards is a major priority for the company.VSNL’s vision is to be a leading provider of global IP-based communications solutions, leveraging its global transmission network and IP core. It has set a target of 15 per cent CAGR organic revenue growth over the next five years.
In the coming year, which segments are likely to get more attention and why?
VSNL has a strong position in the carrier and large enterprise space. While consolidating its strengths in these segments by offering new products and services, its focus will be on mid-market enterprises for a variety of connectivity and managed services. There would also be increased emphasis on retail consumers with the rollout of wireless broadband networks.
What are VSNL’s strong points and which are the areas it needs to strengthen?
The company’s strengths lie in its expansive global infrastructure, including submarine cable networks, IP core and data centres. VSNL’s existing leadership position in several wholesale and enterprise market segments can be leveraged to offer new, higher-margin services.VSNL also derives its strength from its parent, the $27 billion Tata Group.
How is the company placed vis-? -vis competition now that the long distance market is open to more players?
VSNL continues to remain the leading player in the Indian ILD market. At the same time, it has substantially derisked its exposure to the Indian long distance market. India traffic constitutes less than 30 per cent of VSNL’s overall international voice traffic.
What are the company’s broadband and internet plans?
Retail broadband will continue to be a thrust area. This year in particular, with the rollout of wireless broadband networks, VSNL would be better positioned to serve retail consumers. VSNL is the first Indian telco to become a member of the Wireless Broadband Alliance, a global alliance of wireless/Wi-Fi operators.The company has recently launched its Wi-Fi international roaming services. It also has a rich repository of content and services, including movies, videos and music on demand, gaming, educational modules, VoIP and security applications.
Does the company have any acquisitions in the pipeline?
VSNL constantly evaluates opportunities for both organic and inorganic growth.
What are the company’s global plans?
VSNL is already a global communications solutions company with over 50 per cent of its revenues coming from its overseas operations and with about a quarter of its employees based outside India. The company continues to invest in its global operations and seeks to become a leader in all its focus markets. Last year, VSNL entered South Africa through Neotel, and will continue to expand this year.
