VSNL International Plans US$200 Million in Intra-Asia Cable: Multi-Terabit Cable System as part of Major Expansion; Cable Syste

VSNL Singapore Pte Ltd. ("VSNL International"), the
international arm of Videsh Sanchar Nigam Limited (NYSE:VSL)
announces today its plan to build a new multi-terabit submarine cable
system linking Singapore, Hong Kong and Japan. This new intra-Asia
cable will enable VSNL International to better serve its global
customers doing business in and with the burgeoning Asia-Pacific
markets.
   This investment follows the recent announcement by VSNL to build a
new system from India to Europe that will provide connectivity to the
Gulf region and the African continent. The intra-Asia cable, when
combined with the Tata Indicom Cable System (TIC) and the TGN-Pacific
cable system (both of which are built with 8 fibre pairs capable of
supporting 7+ Tbit/s of traffic), will complete VSNL International's
multi-Terabit capability from India to Asia and onward to the US.
   "With Asian bandwidth demand forecasted to grow at an average of
27% CAGR, VSNL International is taking steps to expand its capacity to
serve customers in the booming intra-Asia market," comments Vinod
Kumar, President VSNL International. "This new high-capacity cable
system, soon to be one of the region's largest, combined with our
existing C2C capacity and TGN-P capacity, will enable us to deliver
high-performance bandwidth at the most cost-effective pricing and
fulfil our strategy to become the market leader in bandwidth supply."
   VSNL International will commence construction of the new
intra-Asia cable by December 2006. The scheduled build time for the
project is 12-14 months. The company is already in the process of
finalizing design details, selecting suppliers and identifying
additional partners for the project. Future potential landing stations
for the cable include locations in China, Taiwan, the Philippines,
Vietnam, Malaysia, and Guam.
   Alan Mauldin, Research Director for TeleGeography Research
comments, "TeleGeography's latest analysis suggests that growth rates
in excess of 30% are very likely on these routes, the intra-Asian
market alone will need to supply in excess of 400GB of new capacity
every year."

   About VSNL

   Videsh Sanchar Nigam Limited (NYSE:VSL), a company incorporated
under the laws of India, is now a global communications services
provider offering through its multiple subsidiaries a comprehensive
suite of communications solutions for carriers that need global reach
and reduced total cost of ownership.
   VSNL's Global Network spans 4 continents, comprises major
ownership in 206,356km of terrestrial network fiber and sub-sea
cables, and offers the greatest diversity to, and within, India. With
Trans-Atlantic and Trans-Pacific data transfer capacity of 1 trillion
bits per second and a worldwide MPLS network, VSNL's footprint creates
an unparalleled platform to deliver scalable connectivity to the key
global business pathways.
   VSNL has a global presence including operations in USA, Canada,
UK, South Africa, Singapore, Sri Lanka and India making it the first
Indian truly global telecommunications company. Its range of service
offerings include wholesale voice, private leased circuits, IP, MPLS,
VPN, Internet access, hosting, mobile signaling and several other IP
services. The company is now poised to offer managed data services and
deliver end-to-end telecommunications solutions to carriers and
enterprises globally.
   VSNL is a part of the Tata Group, a $22 billion global
conglomerate comprising 93 operating companies. VSNL is listed on the
major stock exchanges in India and also has its ADRs listed on the New
York Stock Exchange. (www.vsnl.in). VSNL's international division,
VSNL International, is headquartered in Singapore with regional
offices in the US, Europe, and India. Visit us at
www.vsnlinternational.com.

   Forward-looking and cautionary statements

   Certain words and statements in this release concerning VSNL and
VSNL International (collectively hereinafter "VSNL") and its
prospects, and other statements relating to VSNL's expected financial
position, business strategy, the future development of VSNL's
operations and the general economy, are forward-looking statements.
Such statements involve known and unknown risks, uncertainties and
other factors, which may cause actual results, performance or
achievements of VSNL, or industry results, to differ materially from
those expressed or implied by such forward-looking statements. Such
forward-looking statements are based on numerous assumptions regarding
VSNL's present and future business strategies and the environment in
which VSNL will operate in the future. The important factors that
could cause actual results, performance or achievements to differ
materially from such forward-looking statements include, among others,
changes in government policies or regulations and, in particular,
changes relating to the administration of VSNL's industry, and changes
in general economic, business and credit conditions. Additional
factors that could cause actual results, performance or achievements
to differ materially from such forward-looking statements, many of
which are not in VSNL's control, include, but are not limited to,
those risk factors discussed in VSNL's various filings with the United
States Securities and Exchange Commission. These filings are available
at www.sec.gov.