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Tuesday, 6 August, 2002, 11:57 GMT 12:57 UK
WorldCom woes hit Indian phone firm
Indian phone user
WorldCom was VSNL's major partner for US traffic
India's largest international phone service provider, Videsh Sanchar Nigam, has revealed it is owed "approximately $60m to $90m" by bankrupt US telecom giant WorldCom.

Videsh Sanchar Nigam (VSNL), said it was "optimistic" it would collect the cash due from WorldCom.

But the recently privatised VSNL added: "There can be no assurance that VSNL will be able to collect its WorldCom receivables or that VSNL will not be adversely affected by WorldCom's financial difficulties."

The announcement represents the first indication of how much US-listed VSNL is owed by WorldCom, the second-largest US long-distance telephone operator.

"VSNL receives quarterly gross revenues [from WorldCom] of approximately 2.21bn rupees ($45.4m)," the statement said.

"VSNL has received approximately 3.34bn rupees from WorldCom in recent weeks," it added.

WorldCom became the largest ever US corporate bankruptcy in July after admitting a $3.85bn accounting fraud.

Costly calls

WorldCom, which is one of VSNL's major partners, owed VSNL 37.7% of all its outstanding fees at the end of March, the company said.

Latest figure includes the period up to 31 July.

Until July, VSNL was India's only international phone operator, and its charges were amongst the highest in the world.

A call from India to the US could cost up to five times more than one in the opposite direction, resulting in heavy US to India call volumes.

WorldCom always owed VSNL for the big imbalance in call settlement charges, the payments made for terminating a call on another carrier's network.

VSNL shares have fallen 15.9% since WorldCom's collapse.

WorldCom

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