MUMBAI, JAN 22: Videsh Sanchar Nigam Ltd (VSNL) on Monday reported third-quarter net profit rose 34.1 per cent to Rs 400 crores ($86.2 million), beating analysts expectations for flat to marginal growth.VSNL's equity capital expanded to 2.85 billion rupees from 950 million in the previous year, due in part to a two-for-one bonus issue. Ahead of the results, VSNL shares fell 4.26 percent to close at Rs 311.45 while the main Bombay index closed up 1.73 per cent.TO REVIEW CELL VENTURE: VSNL said it was reconsidering its plans to enter into cellular telephony following Telecom Regulatory Authority of India (TRAI)'s green signal to offer limited mobility on basic telephones."We have to see whether the project of cellular servicesas a fourth operator is financially viable for the corporation. This is necessary especially after TRAI proposed to allow fixed service operators to offer limited mobility," S K Gupta, chairman and managing director, VSNL told reporters here.Gupta, however, indicated that the corporation might consider entring the basic telephony market if it made business sense. "All these plans are being worked out. Basically, we areconsidering entering into three areas of National Long Distance Communication (STD), Cellular and Direct-To-Home (DTH)," he said.Gupta said VSNL would invest Rs 1,500 crore over the next three years for starting STD services. "We have all infrastructure in place including earth stations and gateways and are in a position to start the services at a short notice." Asked whether VSNL would go alone or with ally with apartner like Mahanagar Telephone Nigam Ltd (MTNL), he said "we are open to all options."Commenting on the proposed compensation package being offered by government in lieu of advancing the date of breaking VSNL's monopoly status by two years, Gupta said "full compensation package is yet to be worked out and announced."He, however, pointed out that VSNL would like to submit to government that the corporation should be allowed to retain the revenue share from new international operators for the first two years. He said that so far the announcement by government was only interim.On the proposed disinvestment of government stake in the corporation, Gupta refused to comment saying it was upto government, who is the owner, to decide the suitable process for reducing its stake. He, however, said VSNL's shares were grossly undervaluedat the bourses at the current market price of around Rs 325 per share.
