Financial Daily from THE HINDU group of publications
Friday, May 30, 2003
Corporate Results - Telecommunications
Info-Tech - Telecommunications
VSNL net down 44 pc on lower tariffs
MUMBAI, May 29
LOWER international settlement rates and ILD tariffs have continued to hammer down revenues and profit for Videsh Sanchar Nigam Ltd.
The company has reported a 36.6 per cent fall in net profit for the fourth quarter, and a 44.5 per cent fall in net profit for the year ended March 31, 2003.
The board of the company has recommended a dividend of Rs 8.50 per share.
Net profit for the quarter fell to Rs 191 crore from Rs 316.3 crore from the corresponding quarter of the previous year.
Net profit for the year amounted to Rs 780 crore (Rs 1,407.4 crore).
Sales during the quarter fell 41.5 per cent, to Rs 914.6 crore from Rs 1,645.8 crore. Sales for the whole year fell 32.1 per cent, to Rs 4,538.5 crore from Rs 6,508 crore.
Other income for the year, too, fell significantly from Rs 580 crore to Rs 274 crore.
The contribution of data and other value-added services to total revenues increased from 11 per cent in fiscal 2001-2002 to 25 per cent in 2002-2003. The company said this from its focussed efforts on sales and marketing to tap the demand for these services.
Revenue from these other services grew to Rs 828.8 crore from Rs 773.9 crore.
Revenues from telephony services fell over 35 per cent during the year, to Rs 3,709 crore from Rs 5,734 crore.
A company statement claimed that it has maintained and grown its traffic volumes, despite competition, and "is certain that the future growth in volumes will offset the short-term impact on the industry."
Looking ahead, the company's thrust would be on the retail market, said a statement from VSNL. The company has adopted an FMCG model of distribution for its dial-up Internet pack, now available under the Tata Indicom brand at 3,000 retail outlets across the country.
The company has invested Rs 8 crore in various brand-building exercises and retail initiative, said the statement.
"As VSNL consolidates its presence in the retail market, the company is also proactively seeking to tap the opportunities in the corporate market segment for its value-added services," said Mr S.K. Gupta, Managing Director of the company.
"The company is also looking at cutting costs through the optimum utilisation of bandwidth, which constitutes a sizeable share of VSNL's operating expenses."
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