Net income during the period decreased by 2.02 per cent to Rs 1,662.8 crore from Rs 1,697.1 crore. Gross sales for the quarter are on the basis of the proposed revised total accounting rates (TAR) which are close to 10 to 14 per cent lower than the TAR applicable for the corresponding period in the previous year.

Total expenditure during the period was Rs 1,224.2 crore (Rs 1,311.9 crore) and gross profit was Rs 457.7 crore (Rs 417.8 crore). VSNL's net income for the first nine months was 5,018.2 crore (Rs 4,898 crore) and net profit Rs 1,000 crore (Rs 1,004.4 crore). Meanwhile, ICO Global Communications Holdings Ltd filed a voluntary petition for reorganisation under chapter II of the United States Bankruptcy Code on August 27, 1999. VSNL has already invested in the ordinary shares of ICO Global Communications to the tune of $150 million (about Rs 517.9 crore). The Chapter II filing enables ICO Global to continue normal business operations while it develops a plan of re-organisation under the protection of this chapter.

US Court of Bankruptcy is presently seized of restructuring plan of ICO. The plan would involve substantial reduction in the equity stake of the existing investors in the restructured ICO. Since the restructuring plan is still pending with the court, VSNL has not considered any provision for diminution in the value of investment in ICO Global which is indeterminate at this juncture.

VSNL chairman and managing director SK Gupta said despite the reduction in accounting rates with the foreign carriers and a competitive business scenario in certain segments of VSNL, the company has been able to sustain its profitability level.

Registering a growth of 75 per cent, VSNL has a customer base of 3.22 lakh Internet subscribers by December-end compared to 1.82 lakh during the same period previous year. The company had announced a substantial reduction in Internet tariff effective January 15, 2000.

``Within a span of few years, VSNL will be in every house, school, office, medical facility and in every business field to facilitate rapid growth in education, medical services, business and industry,'' Gupta added.