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The offer opens on September 20.

After that the government's holding in VSNL, its overseas telecommunications monopoly, would be reduced from 54.02 per cent to 52.97.

T O D A Y

• VSNL public offer • First Mobile Card • Telecom competition

The offer will close on September 24, said VSNL Acting Chairman and Managing Director Amitabh Kumar.

He said there would be no increase in VSNL's total equity on account of this offer that marks the government's first-ever divestment through a public offer.

Investors can apply for a minimum of 10 shares and in market lots of 10 thereafter, making a minimum investment of Rs 7,500. This will enable participation of small investors.

The government has identified VSNL as a 'navratna' or a business with potential to become a global giant.

VSNL recorded a post-tax profit of Rs 13.76 billion on a turnover of Rs 71.75 billion. The earning per share totalled Rs 144.85 and the board recommended a dividend of 80 per cent.

Kumar said the offer price of Rs 750 per share is at a P/E of 5.1 times of 1999 earnings and 1.3 times of the book value.

VSNL is India's sole international carrier with operational history of 127 years. It has 23 Earth stations and 12 gateway switches located across the country.

Kumar said VSNL would leverage its existing infrastructure for a wide range of value-added services. For that, an amount of Rs 31.3 billion will be invested during the Ninth Five-Year Plan.

''The corporation's emphasis will be to improve the quantity and quality of global telecom services,'' he said. Of this, Rs 18.6 billion will be for exploring new business opportunities and Rs 8.3 billion for value-added services like data communication services, satellite mobile communication, video conferencing, television relay and Internet access.

Kumar said VSNL's international traffic increased 16 per cent in June due to drop in tariff rates as recommended by the Telecom Regulatory Authority of India.

''VSNL will seek to develop its principal business of providing international telephony services in a manner that meets the full demand for such services, optimises the usage of and revenue from these services, positions it to play a significant role in an increasingly liberalised environment and expands its transmission capacity to emerge as a hub, or carriers' carrier for the South Asia region.''

VSNL has signed memoranda of understanding for participation in the global routing network Project Oxygen and in the South Africa and Far East (SAFE) undersea optical fibre system.

It also plans to set up seven new satellite Earth stations in soon, Kumar said.

UNI

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