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Even as the new boss at Videsh Sanchar Nigam Limited, Shailendra Kumar Gupta, takes over, the telecom giant has put off one of its big investment plans.

The public sector overseas telecommunications monopoly was slated to invest $50 million in Agrani, a regional satellite service project of Zee promoter Subhash Chandra.

Subhash Chandra is expected to invest about $140 million in the form of equity in the project.

According to Amitabh Kumar, who was the acting CMD until Gupta took over yesterday, the deal has been put off because Agrani has not fulfilled a number of conditions.

He told reporters here "We have asked Agarni to come back when they are ready to fulfil a number of conditions, including one that requires Lockheed Martin to invest at least $100 million in the project as a pre-condition to VSNL pitching in."

Lockheed has so far invested $50 million in the project. However, he said the VSNL board had only given an in-principle approval for investing in Agrani and that it was subject to review.

The board will meet again after the conditions are fulfilled. Agrani has earmarked a project cost of Rs 33 billion with a 1:1 debt equity ratio.

The company is expecting an initial financial closure by the end of this year with 65 per cent of equity and rupee debt financing already in place.

Meanwhile, Kumar said the talks are on with British Telecom for a marketing tie-up for the South Asian hub that is expected to work out in the next four to five months.

Another Rs 31.3 billion will be invested during the Ninth Plan for expanding VSNL's value-added service.

Kumar said VSNL's focus is on improving the quality of services. As part of its expansion plan on this line, another Rs 18.6 billion will be earmarked for exploring new business opportunities and Rs 8.3 billion for value-added services such as data communication services, satellite mobile communication, videoconferencing, television relay and Internet access.

Kumar said the company would 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 and positions it to be more competitive in the open market.

VSNL has also signed agreements 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 soon.

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