VSNL targets 20% revenue from emerging markets in five years

VSNL targets 20% revenue from emerging markets in five years

Mumbai: India’s largest long-distance telephony firm, Videsh Sanchar Nigam Ltd (VSNL), is targeting 20% of its revenue to come from emerging markets such as South Asia, Africa and West Asia in the next five years on the back of increasing bandwidth demand from outsourcing firms.

VSNL said these markets currently account for an “insignificant" portion of its revenues. It does not treat India, its home market, as an emerging market.

To meet demand from these markets, VSNL is investing $200 million (Rs786 crore) to lay a new four fibre pair cable system linking Singapore, Hong Kong and Japan with an additional connection to em-erging markets of the Philippines and Vietnam.

Direct demand from business process outsourcing (BPO) and knowledge process outsourcing (KPO) firms constitutes 30-35% of VSNL’s bandwidth use. VSNL expects both firms that are outsourcing these services as well as the firms providing such services to start operating from multiple countries. An Indian BPO firm, for instance, may have centres in Vietnam or the Philippines in addition to one or more in India.

“VSNL’s view has been towards building cables between India and major sources and destinations of traffic and, along the way, build access ramps or ways for emerging markets to get on to these networks," said Vinod Kumar, president, global data solutio-ns, VSNL. “We would take similar strategy when we plan new cables West from India," he said. “We need to find ways to serve?emerging?markets?in?Mid- dle East as well as in Africa."

Out of the firm’s total revenues of Rs8,611.21 crore in 2006-07, more than 50% came from outside India. The firm expects to double its revenues in the next five years.