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VSNL to get licence for STD

The government would grant a licence to Videsh Sanchar Nigam to operate National Long Distance Communication (STD), along with other incentives, as part of compensation package for terminating VSNL's monopoly in international calls (ISD) in advance.

Tapan Sikdar, Minister of State for Telecommunications, said in the Rajya Sabha on Tuesday that the government had decided to advance the termination of VSNL's monopoly in ISD by two years to March 2002 instead of March 2004.

It was decided to grant a compensation package to offset the loss that may accrue to VSNL, by way of granting license to VSNL to operate STD sector along with payments of sums equivalent to the entry fee and license fee for five years, net of taxes, without insisting on performance bank guarantee, Sikdar said in a written reply.

The minister also said that a larger compensation package could be considered if it was found justified.

In another written reply, the minister admitted that VSNL's share price had come down more than 50 per cent during the last six months which was mainly due to two factors of general decline in overall Sensex and announcement by government on premature withdrawal of VSNL's monopoly on international telephony including cable connectivity.

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