Search the Internet          Tips  Sites: Finance, Investment

VSNL aims to recover dues from WorldCom

Videsh Sanchar Nigam Limited is exploring various options ranging from recovering dues amounting to Rs 5 billion or to even delink its operations with WorldCom as the possibility of scam-hit US telecom giant's going bankrupt looms large.

WorldCom, earning an annual revenue of Rs 18 billion from its Indian operations, now has to cover the expenses and interest payments on its $30-billion debt.

The Tata-managed VSNL earns 88 per cent of its revenue from international long distance traffic and is busy trying to come to terms with the situation after a 3.8 billion dollars scam jolted WorldCom.

VSNL which has agreements (for carrying traffic from US to India and vice-versa ) with AT & T, Sprint, Startec, IDB apart from WorldCom could delink its operations from WorldCom, industry sources say.

However, officially, WorldCom had assured VSNL that it would pay all its dues and the Indian long distance player had reacted in statement that the ''concern that VSNL may not be able to recover large sums of money from WorldCom seems unwarranted."

VSNL, director, operations, N Srinath said, "We are continuing to monitor the situation closely and believe that our discussions with WorldCom will continue in a positive and mutually beneficial manner.''

VSNL is set to lose anywhere between Rs 1 billion and Rs 5 billion if scam-hit US long distance telecom player, WorldCom, files for bankruptcy. The number two long distance player in the United States, WorldCom, had admitted to an accounting fraud of $3.8 billion raising fears of bankruptcy.

In December last year, VSNL had signed agreement with WorldCom for continuing mutual support in data and voice services in the US and Indian markets.

Call made to the US from India would be routed by VSNL to WorldCom which would then connect it to the Us local access provider. While calls from US to India would be routed by WorldCom to VSNL as per the arrangement.

Since the number of incoming calls are higher than outgoing calls from India, WorldCom has to pay the difference which industry sources estimate between Rs 1 billion and Rs 5 billion in the past quarter. International carriers settle their bills after three to four months.

UNI

ALSO READ:
Govt may investigate WorldCom-VSNL deal
IDT says to offer up to $4 billion for WorldCom unit
Tele majors cagey of tie-ups with WorldCom
WorldCom adds to global bourses' woes
VSNL hopes to resolve WorldCom issue
WorldCom fires CFO over improper accounting
WorldCom charged with fraud as bankruptcy looms
VSNL contacts Worldcom about dues
WorldCom scam may dent VSNL coffers by over Rs 4 billion
WorldCom fall may not trip VSNL lines
FinMin concerned over extent of VSNL loss
Concern unwarranted, says VSNL
More Money Headlines