December 15, 2007 | The Economic Times

VSNL renamed as Tata Communications

Telecom company Videsh Sanchar Nigam Ltd (VSNL), formerly owned by the government and now in the Tata fold, has been renamed Tata Communications Ltd.

The company will, however, now have to pay a fee for using the Tata word in its name like other Tata group firms.

The branding fee is 0.25 per cent of the turnover or 5 per cent of PBT, whichever is less, company sources said.

The new name was approved at the Extraordinary General meeting of the company held today.

Explaining the rationale for the change in name, company chairman Subodh Bhargava said the name VSNL reflected only one of its businesses that of international long distance. "It does not fully capture the wide range of communication services the company provides in India and worldwide," he added.

Bhargava said the new name was decided after carrying out market research and discussions with VSNL staff.

Prior to the disinvestment of the firm by the government in 2002, VSNL was a monopoly player in the international long distance market and did not have the need to build a brand, he said adding the market has changed over the last five years.

VSNL now operates in a competitive environment, where customer recall is important. Besides, the company has entered new businesses like enterprise services and retail broadband, which require a high level of interaction and relationship building with end customers, Bhargava said.