After months of dilly-dallying Videsh Sanchar Nigam (VSNL) on Friday filed an application with the department of telecommunications for a licence to run national long distance (NLD) telephone services in the country.
When contacted, VSNL chairman and managing director S K Gupta confirmed the development. The foray into NLD will be a diversification for VSNL, the country's monopoly international long distance telephony player.
VSNL has become the third telecom company in the country to apply for a NLD operators licence.
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Other telecom companies that have already applied are Bharti Group and Reliance group. The Tata group is also keen to enter the NLD business in a big way.
A number of firms have evinced interest to offer optic fibre capacities to VSNL. Initially, VSNL may take on lease the optic fibres of other telecom companies to run its NLD operations.
VSNL plans to invest around Rs 2,000 crore over a period of seven years in this new foray. The NLD project will be funded through VSNL's internal accruals . VSNL has reserves of Rs 4,000 crore.
Depending upon the first year of operation, VSNL may decide on setting up its own optic fibre cables. "Since VSNL will end its monopoly in ILD business by March 31, 2002, NLD will be a major focus area for the company," analysts said.
Meanwhile, telecommunications major MCI Worldcom of the US and Videsh Sanchar Nigam (VSNL) have jointly installed a frame relay node in Mumbai.
The MCI Worldcom-VSNL node has an installed capacity of 72 numbers of 2 mbps circuits. The node connects to the global network of MCI Worldcom by connecting this node to Hong Kong and New York with high-speed backbone links.
The installation of VSNL-MCI Worldcom frame relay node will improve the data transmission services in this region. It will also offer substantial benefits to corporate customers at affordable prices.
MCI Worldcom provides customer premises services such as voice, advanced massaging and commercial telecommunications service in US and other parts of the world, VSNL said in a press release.