40
Confidential June 29, 2004

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Page 1: €¦ · • Fixed / Mobile • CUG, ... Oracle (retail) VIZNET ... • Redeployment of assets & recovery of debts

Confidential

����������� ������� ������� ��June 29, 2004

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Some of the statements herein constitute “forward-looking statements” that do not directly or exclusively relate to historical facts. These forward-looking statements reflect our intentions, plans, expectations, assumptions and beliefs about future events and are subject to risks, uncertainties and other factors, many of which are outside our control. Important factors that could cause actual results to differ materially from the expectations expressed or implied in the forward-looking statements include known and unknown risks. Because actual results could differ materially from our intentions, plans, expectations, assumptions and beliefs about the future, you are urged to view all forward-looking statements contained herein with caution. VSNL does not undertake any obligation to update or revise forward looking statements, whether as a result of new information, future events or otherwise.

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� ��� �

� Background� Strategies for Growth� Business Units

– Wholesale– Enterprise– Retail– International

� Infrastructure

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� �� � � �� ��

� Wholesale– IUC– Grey Market– Falling realizations and retentions

� Enterprise– Growing market– Bandwidth prices falling– Increasing availability of capacity– India attractiveness for outsourcing continues

� Retail– Internet growth limited– Broadband emerging as new market opportunity

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� �� � �� �� ��� ��� �� �� � ��� ��� ��

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

FY 02 FY 03 FY 04

RetailEnterpriseWholesale

Reduced dependence on ILD

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��� ��� �� �! ������� ��� ��� �

� ��������� �� � � ��" # �� �� ���� ����������$� ��������� �� � � ��� ��������� �� � � ��"" # �� �� ���� ����������$# �� �� ���� ����������$

� ���$�

���� �� �

� ���$�� ���$�

���� �� � ���� �� �

• ILD Minutes• NLD Minutes• Telex• Telegraph• Inmarsat• Calling Cards• Hubbing• Sri Lanka• Nepal

% ���& �� �

���� �� �

% ���& �� �% ���& �� �

���� �� � ���� �� � ���������$

���� �� �

���������$���������$

���� �� � ���� �� � ' � $� �$�

���� �� � �

' � $� �$�' � $� �$�

���� �� � ����� �� � �

• Dial-Up Access• Net Telephony• Cable Net Access• DSL Net Access• Cybercafes• Broadband

• IPLC ++• NPLC• xILL ++• IP-VPN (MPLS)

DomesticInternational

• Frame Relay • ATM• MDNS/VAS• Data Centre ++• TV Uplinking• Internet

Telephony• Carrier Services• Transponder Lse

• Enterprise• Wholesale• Cable Assets

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����� �� ����( �) �

Revenue Enhancement in

Existing Businesses

Investments in New Businesses /

Markets

Improving Competitiveness of

the Company

Ongoing Cost Reduction / Avoidance Exercises

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Confidential

������

Page 9: €¦ · • Fixed / Mobile • CUG, ... Oracle (retail) VIZNET ... • Redeployment of assets & recovery of debts

' � $� �$�

� Grey market impact on Incoming traffic – New IUC provides impetus to gray market – estimated at over 1 B minutes

� Outgoing traffic margins under pressure – volume grows– Aggressive rates offered to the major carriers.– Considerable spurt in the volume in recent months– Gross margin under pressure

� Consistent growth in NLD Traffic – Aggressively pursuing un-aligned Access providers to route their Inter-Circle traffic– Inter-connectivity with all the cellular operators established.– Further growth expected in the coming months.– TTSL subscriber growth likely to help build volumes.

� Outgoing Traffic - BSNL/MTNL – arrangement in place to either carry on traffic or on carriage basis– MTNL – Contracted to carry their traffic for FY 04-05.

� VOIP– Multi Carrier Billing System implemented– Four new VOIP carriers added during the last two months

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' � $� �$�

� Increased emphasis on Hubbing� Sri Lanka

– Commercial traffic flowing with all operators except SLT– Additional data business opportunities – Formal launch of operations in May 04

� Other markets being explored� Calling cards

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Confidential

�� �������

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��

* � ����+ ��� �� ��& & ��� � ��� ��� �

NLD Voice

ILD Voice

Domestic Data

International Data

Data Center

Managed Svc.

Value added Services

Managed Applications

Local Voice

• Fixed / Mobile• CUG, EPABX / Centrex• Voice Mail Services• Toll / Sub-Toll / Free / Premium

• Leased Lines / VPN• TDM / IP / FR

• Hosting / Co-location

• SecuritySynergy with TCS/ CMC/TI + BPO

Domain Expertise within the Group

TelecomInfrastructure

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��

���� ���� �* �$�� ������ �� � �

Mumbai - HO

Call Centre Off-Site Office

City B Branch Office

CDMA

Back Office

City A BranchOffice

ServerConsolidation

Mobile

InternationalConnectivity

Dial/ISDN

• PersonalisedServices

• (SMS/MMS)

Internet

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��

2nd Factory Location

Regional Office

Pune HOMain Factory IP VPN

Dial VPN

InternetVPN

ExtranetVPN

Partner locations

Dealer location

VoIP

Multimedia

PSTN

Mobile workforce

Regional Office

More Locations connected than depicted above

LeasedLine

VSAT

Dealer via internet

+ �� ���� �& ���$�,

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Confidential

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��

� � �� �� ��� �� ���� ��� ����

Services / Benefits

Education• Online & Interactive Learning

E-governance• Access to information

Employment Generation• Tele-working• BPO in small towns / rural areas

Health & Public Services• Tele-medicine kiosks

Entertainment• Video on Demand• Gaming

• VSNL pioneered Internet in India

• Leading the migration to Broadband

• Targeting the mass market… High Speed Internet at affordable tariffs

� e.g. 512kbps home packages for Rs. 360 per month

• Partnering with:

� Content providers

� PC manufacturers

� CPE / STB vendors

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Confidential

�� ��� ���

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London

Hong Kong

Singapore

Deployed Planned

( $��$�# �& $, ����- �� ��) �,

Washington

International Business Group to include:•Carrier sales addressing sales of global cable assets

•Carrier Relations team supporting the off-shore wholesale and retail voice business•Enterprise sales directly addressing non-Indian MNCs and supporting sales to Indian MNCs

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��

� � ��� �- ��

RetailBroadband

Wholesale Services

ILD, NLD, CallingCards, Int’l Proj

Internet, Video, Voice: 3 Play

Wireline Access (*)

Metro FibreNetwork

National Backbone

InternatlSub Cable

EnterpriseServices

Data & Voice: Managed Svcs

Network& IT

Integrated BPO: Outsourced

VSNL

InternationalBusiness

Carriers, Enterprise, Cable

BillingSystems

Cust SvcSystems

CNMSystem

InternatlPOPs

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��� � ���

� Infrastructure– International Cable

• SMW4• Tata Cable• Other projects

– Domestic Network • Expand to 25,000 km• Build, buy and lease other routes

– MAN networks• 30+ cities• Leverage existing Tata infrastructure

– Last Mile• Fibre to corporates• Mix to residential – DSL, Ethernet, Cable, …

– Systems - NMS

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Confidential

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Page 22: €¦ · • Fixed / Mobile • CUG, ... Oracle (retail) VIZNET ... • Redeployment of assets & recovery of debts

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New Delhi

� �� ��� �) ��

Jallandar

Cochin

ChennaiBangalore

Hyderabad

Kolkatta

Guawahati

Kanpur

RajkotAhmedabad

Nagpur

PoPs at all major • Level 1 TAXs of BSNL/MTNL• TAXs of Private BSOs• MSCs of Mobile service providers

Lucknow

Jaipur

Mumbai

Raipur

Cuttack

Patna

Ambala

Bhopal

Coimbatore

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��

# �� �� �, �������� �� � � ����

Cochin

Chennai

MumbaiSMW2SMW3SAFEFlagTata CableSMW4

GulfSMW2SMW3SAFEFlagSMW4

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��

���������$�� ��$��� ���� �� �,

Delhi

Kolkata

Hyderabad

Bangalore

Cochin

Chennai

SEA-ME-WE21994

FLAG1997

SEA-ME-WE31999

Mumbai

SAFE

• Cable/Carrier Redundancy• Only carrier with Capacity on 5 out

of 5 cables coming into India at this time

SMW4 RFS Mid 2005

Network Administrator

VSNL Cable

Chennai – Singapore RFS Q4 2004

i2i

SEA-ME-WE42005

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��

Chennai, IndiaChennai

Singapore

• Landing points : Chennai to Singapore

• Length : 3175 Km

• No. of fiber pairs : 8

• System capacity : 5.12 Tb (8 fp x 64 � x 10Gb)

• Principal Supplier : M/s Tyco

• Branching Units : 4

• Initial equipage : 4 fp lit + 4 fp dark

• Initial capacity : 320 Gb (4 fp x 8 � x 10Gb)

• Contract Signed : 3rd October 2003

• RFS date : Q4 of 2004

CABLE SYSTEM CONFIGURATION

� �� � �� ��$������ , ��, ���� ���, ���

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Internet Backbone

Mumbai

Ernakulam

Chennai

Hyderabad

Bangalore

Calcutta

New-Delhi

Pune

Kanpur

Jullunder

Trivandrum

Coimbatore

Chandigarh Dehradun

Jaipur

Patna Guwahati

Bhubaneswar

Pondicherry

Goa

Gandhinagar

Indore

International ConnectivityTier One NodesTier Two Nodes

Tier Three Nodes

Arvi

~ 2 GB

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Domestic VPN52 cities

Can expand to 100 cities NOW

300 cities in 6 months

# �� �� ��� + � �� � ���

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London

Tokyo

Singapore

Mumbai

NewarkSan Francisco

Deployed Planned

Legend

NOC in

India

( $��$�� + � ��� + � ��$���� , �� �& $, �� ��

Hong Kong

Frankfurt

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Customer Service

Organisation• Re-created from scratch• Integration of multiple call centres• Separate Corporate & Retail structures

Processes• Re-engineered all processes

� Complaint Handling� Trouble ticketing & Escalation� Customer Communication

Systems• Migrated from legacy systems

� Oracle (retail)� VIZNET (corporate)

• New platform for Retail Internet (authentication, billing, e-mail, etc.)

Significant improvement in Customer Satisfaction, Billing Accuracy and Service Levels

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��$� �. �� ��� ����

� 3 Tier Sales structure -500+ people

� Product Management, Pre-sales Tech Support, Solutions Development –Vertical and Horizontal

� Direct Marketing� Unified Tata Brand

Large Corporate – 500 Large Accounts – TIEBU

Channels – 55+ partners across 17 locations, now contribute 50% of

enterprise revenue

Retail – FMCG type 50 Distributors

+ 7,500 Retail Outlets in 33 cities

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� Team– Staff strength reduced by over 1,000 from 2750 – Infusion of external skills of over 500 people– Plus over 1,000 people on contract (call centres, field support, OSP)

� Industry HR practices

� Major upgrade of IT systems

� Significant Reductions in Opex (~ Rs 200 cr) – notably bandwidth� Asset re-valuation – write down by about Rs 900 cr

� Group Quality Process – Tata Business Excellence Model� Qualified for TL 9000 certification

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����� ����, ��

Revenue Enhancement in Existing Businesses

Investments in New Businesses / Markets

Improving Competitiveness of the Company

• Launch of new Corporate Data offerings

• Expansion of VPN networks, Data Centres

• Implementation of ATM and MPLS networks

• Growth in NLD Voice and Data services

• Improvement in Customer Service through Integrated Call Centres

• Balance Sheet Restructuring to reflect realistic asset value

• People skill enhancement & business process re-engineering

• Expansion to Sri Lanka, USA, Singapore: Intnl. Business Group

• Broadband services• Laying of Submarine Cable to

Singapore• Investments in MAN

Cost Reduction / Avoidance Exercises

• Surrender of surplus satellite bandwidth

• Optimisation of domestic & international bandwidth

• Redeployment of assets & recovery of debts

Page 33: €¦ · • Fixed / Mobile • CUG, ... Oracle (retail) VIZNET ... • Redeployment of assets & recovery of debts

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Page 40: €¦ · • Fixed / Mobile • CUG, ... Oracle (retail) VIZNET ... • Redeployment of assets & recovery of debts

Confidential

Thank You