"Being a government-owned company, we cannot take any illegal step. Once it is legal, we will start providing the service. We will make whatever investment is required as we are a cash-rich company. We already have most of the infrastructure in place and only some incremental costs need to be added," chairman and managing director Shailendra Kumar Gupta told The Financial Express.

It is felt that any delay in providing internet voice could cost the company Rs 1,000 crore in revenues. But, according to Gupta, these are all hypothetical figures. Other companies would find it difficult to overtake VSNL as they would require more investments to upgrade technology as internet telephony makes internet slower and its quality deteriorates.

Gupta believes that even after the end of VSNL's monopoly in 2004, the company is capable of withstanding competition. "VSNL is not afraid ofcompetition. We will lose monopoly over international telephony and revenue-sharing arrangement may not be in our favour. But volume growth by that time would be enough to compensate for any losses," he said.

The functioning of VSNL needs to be improved to meet competition from the private sector, both national and international. It would call for adoptionof the best technology, quick and efficient service to consumers, he said.

However, he contested the contention that private sector companies provide better and prompt service. "The view that private sector provides better service is a myth. VSNL is still considered to be the best in areas where it is already facing competition from private sector," he argued.

"As for the quality of internet service, ours is the best among the internet service providers. As for technology, ours is at par with any international company and may be slightly ahead of other Indian companies," he pointed out.Gupta ruled out suggestions that VSNL should prepare for themillennium by taking over Mahanagar Telephone Nigam, STAR TV and Essar Telecom. "We have not thought on those lines. But I can tell you VSNL is not in a position to take over a financially-strong company like MTNL. Moreover, question of taking over MTNL, which is also a government company, does not arise. However, we are already cooperating and that cooperation can be widened, if necessary," said Gupta.

Speaking on the company's investment in the eastern region, Gupta said that the company had already invested Rs 300 crore to develop infrastructure in the region. A new earth satellite is being set up at Bhubaneswar. Second dish antenna will be installed at Halisahar earth station in West Bengal.

The new VSNL building at Ultadanga in Calcutta will have a high power antenna. In short, VSNL infrastructure in the region is ready to cope with the potential of the region. For example, in Calcutta, the number of internet subscribers is 21,000 and 2,000 new subscribers are being added every month.