Teleglobe buyout to push VSNL revenues up 200%

Internet and telecom major Videsh Sanchar Nigam Ltd (VSNL) expects to post 200 per cent increase in revenues in the next financial year, to Rs 10,231.2 crore from Rs 3,410.4 crore in recorded in FY04.

This spurt in revenue would follow the merger of Teleglobe International Holdings' with the company.

The revenue growth VSNL is projecting is after taking into consideration the revenues of Teleglobe, which had posted $738 million during the nine-month period from January to September 30, 2005.

Going by these figures, VSNL's revenues would leap to around Rs 10,231.2 crore, making it one of the largest companies in India in revenue terms.

The merger will also make the Tata group company the third largest international voice provider, next only to the US-based AT&T and MCI.

Speaking to Business Standard from Montreal, Srinivasa Adepalli, VSNL head (corporate strategy), said: "Teleglobe will be merged with VSNL's global subsidiary, VSNL International, and the combined entity will own and operate one of the largest international mobile, data and voice networks in the world."

However, Teleglobe as a brand will not be phased out. It will continue to serve as the product brand for voice, mobile and IP transit wholesale services of VSNL, while VSNL International will remain the product brand for the company's wholesale IP, ethernet and enterprise businesses.

VSNL had announced the acquisition of Bermuda-based Teleglobe in July 2005 for $239 million (comprising payments of $4.50 per share to its shareholders and assumption of debt), which was completed today.

This makes it the third largest in international voice business with the Tata company clocking over 17 billion minutes per annum, next to AT&T (18 billion minutes) and MCI (17.5 billion minutes).

The acquisition also gives VSNL International coverage in over 35 countries, 240 geographical regions, customer base of over 1,400, apart from owning bandwidth in over 80 sub-sea and terrestrial cables.

The entity will have a terrestrial network of 2.06 lakh km of fibre and sub-sea cable, with 275 points of presence in 25 countries and access to five geo-stationary satellites through over 30 dedicated earth stations.