The government commitments include the freedom to decide the choice of transmission medium, to establish its own links for inter-connecting its various earth stations and gateways in the country, to provide any value-added service either on its own or in association with others after obtaining licences and to provide local loop connectivity by installing its own wireless systems. Besides, DoT has also committed to provide VSNL with links of up to 2 Mbps to any customer location on demand without approvals on a case-by-case basis. In addition, the department has committed to deal with various proposals from VSNL for joint ventures and project approvals within committed timeframes.

On its part, VSNL has committed to undertake a number of major projects and complete them on schedule. These include the $60 million SEA-ME-WE-3 (South-East Asia-Middle-East-Western Europe 3) cable system which will have landing points at Kochi and Mumbai and will be ready by the end of the year and commissioning of three new Standard-A earth stations by February, 1999, at Arvi, near Pune, Halisahar and Korattur, near Chennai, for service video, data and voice applications in the western, eastern and southern regions.In addition, VSNL has also committed to award the contract for a highly advanced network management system by the end of the year. The system will manage the switching, transmission and services network of VSNL and provide flexibility in routing, billing and fault rectification.

The company has also undertaken to provide new earth stations for video uplinking aimed at serving TV channels broadcasting from India. It will also commission a new gateway digital switch at Gandhinagar inGujarat which will increase the strength of its gateway switches to seven.

In addition, to undertakings on new projects, VSNL is also to give traffic and service level guarantees to DoT for its core international voice telephony operations. These include success ratio of international telephone calls, network availability and customer satisfaction. The MoU also binds VSNL to perform financially by meeting laid down criteria for gross margin, net profit.

VSNL has an outlay of Rs 5,200 crore for the Ninth Five Year Plan, which envisages significant investments in transmission and switching infrastructure, global mobile personal communications system and direct to home service for dissemination of internet services, data and entertainment.