The company will, however, now have to pay a fee for using the Tata word in its name like other Tata group firms.

The branding fee is 0.25 per cent of the turnover or 5 per cent of PBT, whichever is less, company sources said. The new name was approved at the Extraordinary General meeting of the company held on Friday.

Explaining the rationale for the change in name, company chairman Subodh Bhargava said the name VSNL reflected only one of its businesses  that of international long distance. "It does not fully capture the wide range of communication services the company provides in India and worldwide," he added.

Bhargava said the new name was decided after carrying out market research and discussions with VSNL staff.

Prior to the disinvestment of the firm by the government in 2002, VSNL was a monopoly player in the international long distance market and did not have the need to build a brand, he said adding the market has changed over the last five years.

VSNL now operates in a competitive environment, where customer recall is important. Besides, the company has entered new businesses like enterprise services and retail broadband, which require a high level of interaction and relationship building with end customers, Bhargava said. 

He said VSNL, with the acquisitions of TGN and Teleglobe, is emerging as a major player in the global telecom services market.

The company now competes not only with large Indian business groups like Reliance [Get Quote] and Bharti but also with globally renowned firms like AT&T, Verizon and BT, he said.

VSNL's goal is to create a differentiated positioning as a global telecom player and also derive marketing and cost synergies with the Tata Group's telecom and IT businesses.

There is immense goodwill and brand awareness attached to the Tata mark globally due to the acquisitions made by various Tata Group companies, he said.