VSNL witnessed bargain hunting by institutions on Tuesday after being battered of late.
The stock was down marginally by 0.3% at Rs 93.25 on the BSE in afternoon trades. Earlier, it came off from the day's high of Rs 95.40. A modest volume of 2.46 lakh shares was recorded on the counter.
Videsh Sanchar Nigam scrip, which currently trades close to its multi-year low, saw bargain hunting by institutions. On Monday, it surged by 4% at Rs 93.55. From a recent low of Rs 85.05 on 7 February 2003, the scrip has gained 9.6% in a few sessions to the current Rs 93.25.
As per recent reports, VSNL is set to launch telephone calling cards both in India and overseas. Domestic phone cards will be used only in India.
Also, there were reports that the Tata group has decided to merge the Internet Service Provider operations of Tatanova with VSNL. Tatanova has around 50,000 Internet connections and a 2% share in the Indian ISP market. The integration of Tatanova's ISP business with VSNL has already commenced. Tatanova is operational in cyber cafes in five cities and offers IP-based Virtual Private Networks, standard or customised Internet data centre services and other value-added and industry-specific solutions.
VSNL is a leading Internet service provider. India's Internet subscriber base stood at 380,000 customers on 30 September 2002, with VSNL and Satyam Infoway leading the race among ISPs, with a subscriber strength of 600,000 each.
VSNL has now decided to offer its benchmark information, communication and entertainment services under the brand of Tata Indocom.
The company will offer its re-branded Internet services through more than 2,400 retail outlets across the country. It currently has presence in eight locations - Mumbai, Chennai, Delhi, Bangalore, Hyderabad, Pune, Pondicherry and Coimbatore.
VSNL is the largest overseas telephony provider in India. It is the preferred international carrier for Bharat Sanchar Nigam till April 2004. Last year, the company soft-launched its national long-distance service in India from six centres, including Mumbai and Ernakulam.
For the third quarter ended December 2002, VSNL posted a 40% fall in sales to Rs 1,048.30 crore (Rs 10.48 billion). The changed scenario in the international telephony sector, including sharp declines in international settlement rates and interconnect rates with Indian operators, and the opening up of the sector to competition had an adverse impact on the company's performance. Net profit fell by 61% to Rs 137.90 crore (Rs 1.37 billion).
VSNL has been steadily making efforts to cut down on its costs, primarily through the optimum utilisation of bandwidth, which constitutes a sizable share of VSNL's operating expenses. The company expects to see this initiative bearing fruits in the next financial year.
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