Did the Tatas act in the best interest of VSNL?
The Tatas say yes. Says Srinath: “With VSNL’s international long-distance (ILD) monopoly over, a customer interface is an absolute necessity.” VSNL has nothing but a few gateways to carry overseas calls, a shaky assurance from MTNL and BSNL to route their traffic through it for two years and an ISP business that makes little money.Thus, it urgently needs to tap the retail base and invest in network rollouts. The moment ILD traffic is routed through the other private gateways, VSNL will take a huge hit. Says a senior Tata official: “Today, 87 per cent of VSNL’s revenues come from the ILD business, but we have little or no direct touch with our customers. The TTSL investment will gain us access to the end consumer.” TTSL’s plans involve investing Rs 8,247 crore by 2008 to provide basic phone services in seven states. TTSL hopes to build a customer base of 28 lakh by 2006. If VSNL does not invest in TTSL, feel officials, it would have to spend upwards of Rs 10,000 crore over the next five
