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VSNL to invest Rs 1 billion for Internet expansion

Indian state-run telecoms giant Videsh Sanchar Nigam Ltd will spend over Rs 1 billion ($21.22 million) to expand its Internet services to 20 locations by the year-end, its chairman and managing director S K Gupta said on Monday.

VSNL, the country's largest Internet service provider, has already expanded to 12 centres, after the government allowed it to offer Internet services all over India. It started out offering services in six cities. "Ultimately, we will spend over Rs 1 billion for Internet expansion to 20 cities by the year-end," Gupta told reporters at the sidelines of a function to launch corporate Internet services.

The government gave VSNL an all-India licence as part of a compensation package for ending the firm's monopoly over international telephony in April 2002, two years ahead of schedule.

VSNL now has nearly 700,000 retail subscribers after reducing access prices over the past year.

And while private sector ISPs are now raising prices, Gupta said VSNL had no intention to follow suit immediately.

"While we would like to be competitive, we have no intention to match the cheapest in the field because we are quality conscious," he said.

VSNL on Monday launched new Internet-based services, including virtual private networks, mail services and communication software for corporate customers.

Gupta, however, refused to say how much revenue VSNL was targeting from these services.

VSNL shares closed down 1.71 per cent at Rs 310 at the National Stock Exchange on Monday, while the 50-share index closed down 0.65 per cent.

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