Document:

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                                                                     EXHIBIT 4.2

                                                            NO: MTNL/RA/ILD/2003
                                                                DATED 27.05.2003

                             INTERCONNECT AGREEMENT

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                             INTERCONNECT AGREEMENT

This agreement is made on this 27TH DAY OF MAY 2003 to be effective from
1.5.2003 Between MAHANAGAR TELEPHONE NIGAM LIMITED having its registered office
at Jeevan Bharti Building, Tower No.1, 12th Floor, 124 Connaught Circus, New
Delhi- 110001 (hereinafter called "MTNL") of the ONE PART and M/s VIDESH SANCHAR
NIGAM LIMITED a company registered under the Companies Act 1956 and having its
registered office at Videsh Sanchar Bhavan, M.G. Road, Mumbai - 400 001 and
Corporate Office at Lokmanya Videsh Sanchar Bhavan, Kashinath Dhuru Marg,
Prabhadevi, Mumbai 400 028 (hereinafter called ILDO which expression shall
unless repugnant to the context, include its successors in business, legal
representatives and administrators or permitted assigns) of the OTHER PART.

WHEREAS VSNL holds an International Long Distance license to provide
international long distance services under Section 4 (1) of the Indian Telegraph
Act, 1885 to provide INTERNATIONAL LONG DISTANCE SERVICE on the terms and
conditions specified in such Licenses.

IT IS AGREED AS FOLLOWS:

         1.       Each party, i.e. MTNL as well as the ILDO, does hereby agree
                  to:

                  (a)      Interconnect its Network to the Network facilities of
                           the other party; and

                  (b)      Make available to the other party the services,
                           facilities and information as specified in this
                           interconnect Agreement.

                  (c)      Provide the other interconnected party with
                           interconnection traffic carriage and fault detection
                           of a technical and operational quality that is
                           equivalent to that which each party provides to
                           itself.

         2.       The ILDO shall ensure that its interconnect facilities
                  delivered at each point of interconnection (POI) conform to
                  the applicable quality of services (QOS) standards as
                  prescribed by Licensor/TRAI from time to time and technical
                  specifications for interconnection by the relevant delivery
                  date determined pursuant to the provisions of this Agreement.

         3.       ILDO shall be responsible to provide, install, test, make
                  operational and maintain all interconnection facilities on its
                  side of point of interconnection (POI) unless otherwise
                  mutually agreed.

         4.       ILDO shall comply with all security and safety practices and
                  procedures notified from time to time by the LICENSOR or any
                  other competent Authority authorized by law.

         5.       Notwithstanding anything contained hereinafter, it is further
                  agreed and declared that both the parties reserve the right to
                  modify at any time the terms and conditions of the
                  Interconnect Agreement, in case of receipt of a direction from
                  the LICENSOR or any other regulatory/competent authority.
                  Any of the terms of this agreement may be reviewed at the
                  request of either party.

         6.       This agreement is intended to apply only to the provision of
                  Services by one party to another party and to related matters
                  concerning the parties and may not be construed as conferring
                  benefits on the third persons.

         7.       The parties acknowledge that this agreement is intended to
                  apply to the provisions related to ILD (international long
                  distance) services only between the MTNL as a provider of
                  various telecommunication services and ILDO as a provider of
                  International Long Distance service and not as a provider of
                  any other service.

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         8.       (a)      The parties agree that billing of subscribers who
                  select ILDO as their international long distance carriers by
                  choosing the assigned carrier access code of ILDO shall be the
                  sole responsibility of the ILDO.

                  (b)      MTNL shall supply on demand from ILDO subscriber
                  related directory information such as name, address, change of
                  address on a computer floppy / CD on monthly basis on payment
                  of charges to MTNL by ILDO which shall be mutually discussed
                  and agreed at the time of implementation of CAC/CIC.

                  (c)      The parties acknowledge and agree that for the
                  purpose of billing of subscribers by ILDO when CAC / CIC is
                  introduced there shall be issues arising in respect of
                  disconnection of subscribers by the access providers due to
                  non payment of dues of one or more ILDOs. To protect the
                  interests of all the parties concerned, it is agreed that the
                  parties shall refer the matter to licensor/regulator to issue
                  necessary guidelines/regulations in this regard, so that these
                  are applied uniformly to all operators.

                  (d)      If the calls are dialed without CAC/CIC and MTNL
                  decides to handover such calls to the ILDO for further
                  carriage and termination in the distant country, MTNL shall do
                  the subscriber billing and collect payments from its
                  subscribers.

         9.       The parties acknowledge that substantial costs will have to be
                  incurred by MTNL for Implementation of CAC/CIC based carrier
                  selection for providing choice to the subscribers for availing
                  the services from ILDO. Parties agree that such costs will
                  have to be shared among the ILDO's. The basis of such sharing
                  mechanism may have to be decided by the licensor/regulator for
                  which the parties agree to make a reference to the
                  licensor/regulator for issuing the guidelines. It is further
                  agreed that the MTNL shall be able to take up the work of up
                  gradation for Implementation of CAC/CIC on receipt of the
                  required amount for such upgradation.

         10.      In case any of MTNL's resources and other support facilities
                  are availed by the ILDO, MTNL will be free to charge from the
                  ILDO for use of such resources

         11.      The parties further acknowledge that the parties will mutually
                  discuss to arrive at solutions to the issues arising out of
                  any change in the terms and conditions of the license of
                  either party or any change in the interconnection regulation
                  at any point of time requiring changes in the interconnection
                  arrangements in this agreement.

         12.      Each Party agrees that the other is treated no less favorably
                  than any other with regard to commercial, interconnectivity
                  and other aspects of the Interconnect Agreement.

         13.      The Articles from 1 to 9 (one to nine) along with the
                  connected Annexures (1 to 5 and Schedule I) as given below,
                  specifically lay the terms and conditions as per the
                  respective titles and these terms and conditions shall govern
                  the mutual relations of the parties and they shall form a part
                  and parcel of this agreement.

         14.      MTNL and ILDO shall try to maximize traffic flow to each other
                  (within the constraints of Government directions) and ILDO
                  shall handover all the traffic meant for MTNL's subscribers
                  directly through the designated gateway TAXs/Tandem's/Local
                  Exchanges of MTNL only.

         15.      MTNL and ILDO shall exchange only `Toll Quality Voice
                  Telephony' traffic at the Points of Interconnection.

         16.      In case of any difference of interpretation between contents
                  of the main body of the agreement and the Schedule /
                  Annexures, the contents of the main body shall prevail.

         17.      Interconnection and revenue sharing arrangement for all other
                  services being currently provided by ILDO and extended by MTNL
                  to its subscribers, shall be separately discussed to arrive at
                  mutually

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                  agreeable arrangement within 8 weeks of signing of this
                  agreement, till then the existing arrangements shall continue.

         18.      The revenue sharing as per schedule-I will, however, be
                  effective from May 1, 2003

         19.      Point deleted.

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                                      INDEX

<TABLE>
<CAPTION>
                                                      PAGES
ARTICLE SUBJECT / TITLE                        FROM            TO
-----------------------------------------------------------------
<C>                                            <C>             <C>
1.  Definitions                                  7      -      12

2.  Technical issues pertaining                 13      -      19
    to interconnection

3.  Interconnect Capacity                       20      -      24

4.  Testing and commissioning                   25      -      26
    of Interconnect circuits

5.  Interconnect Performances                   27      -      28
    standards

6.  Interconnection charges                     29      -      31

7.  Interconnect Billing System                 32      -      36

8.  Disputes (other than billing
    Disputes) and arbitration                   37      -      37

9.  Liability, Indemnity and
    Intellectual Property Rights                38      -      38

          Annexure - 1                          39      -      39

          Annexure - 2                          40      -      40

          Annexure - 3                          41      -      41

          Annexure - 4                          42      -      42

          Annexure - 5                          43      -      44

Schedule I                                      46      -      48

Annexure I                                      49      -      49
</TABLE>

<PAGE>

         IN WITNESS WHEREOF the parties hereto have caused this Agreement to be
executed through their respective authorized representatives on the day and year
first above written.

Signed and Delivered for and on behalf of MTNL.

By Shri S. C. Ahuja
Company Secretary
Mahanagar Telephone Nigam Limited,

Signed & Delivered on Behalf of M/s. Videsh Sanchar Nigam Limited

By Shri Satish Ranade
Executive Director (Legal)
& Company Secretary,
Videsh Sanchar Nigam Limited.

in the presence of:

Witnesses

    1. _____________________

    2. _____________________

<PAGE>

                                   ARTICLE - 1

                  1. DEFINITIONS

In this Agreement, words and expressions will have the following meanings as are
respectively assigned to them unless the contrary intention appears from the
context:

1.1      "APPLICABLE SYSTEMS":     means all the necessary equipment, systems /
                                   sub systems and components of the network
                                   engineered to meet relevant ITU standards,
                                   ITU - T, ITU - R recommendations, TEC
                                   Specifications and Industry standards for
                                   provision of service in accordance with
                                   operational, technical and quality
                                   requirements and other terms and conditions
                                   of the License Agreement.

1.2      "BILL ISSUE DATE":        means the 10th of every Calendar month.

1.3      "BILLING PERIOD":         means the period of one Calendar month
                                   commencing on the first day of every month.

1.4      "BILLING INFORMATION":    means the Information, as specified in
                                   Article 6 & 7, necessary to ascertain the
                                   charges payable by either party under
                                   agreement.

1.5      "BSNL":                   means Bharat Sanchar Nigam Limited.

1.5A     "BSO":                    means Basic Service Operator.

1.6      "CLI or "CALLING LINE
INDENTIFICATION":                  means the information generated by the
                                   Network capability which identifies and
                                   forwards the calling number through the
                                   interconnected MTNL's / ILDO's Network.

1.7      "CONNECTABLE SYSTEM":     means a telecommunication system, which is
                                   authorized to be run under a license, which
                                   authorizes connection of that system to the
                                   Applicable system.

1.8      "DoT"                     means Department of Telecommunications and/or
                                   its successors.

1.9     "DIRECT EXCHANGE LINE":    means a telephone connection between the
                                   subscriber's terminal equipment and the
                                   terminal exchange.

1.10     "FUNDAMENTAL PLAN":       means Numbering Plan, Traffic Routing and
                                   Switching Plan and transmission Plan issued
                                   by Department of Telecom and as may be
                                   amended from time to time.

1.11     "INFRASTRUCTURE
PROVIDER (S)":                     means a person or persons providing inactive
                                   elements of the telecom network including
                                   dark fibers, right of way, duct space,
                                   towers, etc. as well as those who provide
                                   end to end bandwidth to other service
                                   providers.

1.12     "INSTALLED CAPACITY":     means the total number of lines for which
                                   switching equipment is available in the
                                   exchange for connection of subscribers.

<PAGE>

1.13     "INTERNATIONAL
SERVICE":                          means the telecom services originating in
                                   the country and terminating outside the
                                   country and vice versa.

1.13A    "INTERNATIONAL
GATEWAY SWITCH":                   means Point of Presence of the ILDO as
                                   approved by the Licensor.

1.14     "INTERNATIONAL LONG
DISTANCE SERVICE (ILD SERVICE)
- SCOPE OF ILD SERVICE IS AS
FOLLOWS:                           The ILD Service is basically a network
                                   carriage service (also called Bearer)
                                   providing International connectivity to the
                                   Network operated by foreign carriers. The
                                   ILD service provider is permitted full
                                   flexibility to offer all types of bearer
                                   services from an integrated platform. ILD
                                   service providers will provide bearer
                                   services so that end-to-end tele-services
                                   such as voice, data, fax, video and
                                   multi-media etc. can be provided by Access
                                   Providers to the customers. Except " Global
                                   Mobile Personal Communication Service
                                   (GMPCS) including through INMARSAT" for
                                   which a separate license is required. ILD
                                   service providers would be permitted to
                                   offer international bandwidth on lease to
                                   other operators. ILD service provider shall
                                   not access the subscribers directly which
                                   should be through NLD service provider or
                                   Access Provider. Resellers are not
                                   permitted.

1.15     "INTER CIRCLE TRAFFIC":   means the long distance traffic originated
                                   in one telecom circle and terminating in
                                   another telecom circle.

1.16     "INTRA CIRCLE TRAFFIC":   means the long distance traffic originating
                                   and terminating within boundaries of the
                                   licensed Service Area.

1.17     "LOCAL AREA":             means the geographical area served by an
                                   exchange or an exchange system and which is
                                   co-terminus with Short Distance Area (SDCA)
                                   or where the telegraph authority has
                                   declared any area served by an exchange
                                   system to be the local area for the purpose
                                   of telephone connections. All exchanges
                                   within the local area being treated as multi
                                   exchange system.

1.18     "LOCAL CALLS":            "Local calls" are calls which originate from
                                   subscribers of a service provider's
                                   network/exchange system in a SDCA and
                                   terminate either (i) within the same SDCA or
                                   (ii) in the contiguous telephone exchange
                                   system of the adjacent SDCA, provided these
                                   are delivered/handed over to another service
                                   provider's network in the destination SDCA
                                   only.

1.19     "LONG DISTANCE CALL":     means a call terminating in a Local  Area
                                   other than in which it originated.

1.20     "LONG DISTANCE
CHARGING AREA (LDCA)":             means one of the several areas into which
                                   the country is divided and declared as such
                                   for the purpose of charging for trunk calls
                                   which generally is co -terminus with
                                   Secondary Switching Area (SSA).

1.21     "LONG DISTANCE
CHARGING CENTRE (LDCC)":           means a particular Trunk Exchange in a Long
                                   Distance Charging Area declared as such for
                                   the purpose of charging Long Distance calls.
                                   Headquarters of SSAs are generally LDCCs.

<PAGE>

1.21A    MTNL:                     means Mahanagar Telephone Nigam Limited

1.22     "LICENSOR"                shall refer to President of India acting
                                   through any authorized person, who grants
                                   License under Section 4 of Indian Telegraph
                                   Act 1885 and Indian Wireless Telegraphy Act
                                   1993, unless otherwise specified.

1.23     "MESSAGE":                means anything covered within sub-section
                                   (3) of section 3 of the Indian Telegraph Act
                                   1885.

1.24     "NATIONAL LONG
DISTANCE (NLD) SERVICE":           means carriage of switched bearer
                                   telecommunication service over long distance.

1.25     "NATIONAL LONG
DISTANCE SERVICE
OPERATOR (NLDO)":                  means the telecom operator providing the
                                   required digital capacity to carry long
                                   distance telecommunication service within the
                                   scope of the License for National Long
                                   Distance Service, which may include various
                                   types of tele services defined by ITU, such
                                   as voice, data, fax, text, video, and multi
                                   media etc.

1.26     "OTHER SERVICE
PROVIDERS":                        means the operators who offer service for
                                   applications like tele - banking, tele -
                                   medicine, tele - education, tele - trading,
                                   E - Commerce etc. by using infrastructure
                                   provided by various access providers. These
                                   other service providers (OSPs) do not
                                   infringe on the jurisdiction of access
                                   providers and do not provide switched
                                   telephony.

1.27     "PAY BY DATE"             means the 15th day from the date of issue of
                                   bill.

1.28     "PHONOGRAM"               means a telegraphic message sent to or
                                   received from a telegraph office by a
                                   subscriber over telephone.

1.29     "POINT OF PRESENCE
(POP)" IN RESPECT OF BSO:          means setting up of switching center and
                                   transmission center of appropriate capacity
                                   by Basic Telephone Service provider at the
                                   SDCA level to provide, on demand, service of
                                   prescribed quality and grade of service in a
                                   non-discriminatory manner.

1.29A    "POINT OF PRESENCE
(POP)" IN RESPECT OF NLDO:         means setting up of switching center and
                                   transmission center of appropriate capacity
                                   by national Long Distance Service provider
                                   at the LDCC level to provide, on demand,
                                   service of prescribed quality and grade of
                                   service in a non-discriminatory manner or as
                                   approved by the Licensor from time-to-time.

1.29B    "POINT OF PRESENCE
(POP)" IN RESPECT OF ILDO:         means setting up of switching center and
                                   transmission center of appropriate capacity
                                   by the ILDO to provide on demand, service of
                                   prescribed quality and grade of service in a
                                   non-discriminatory manner.

1.30     "PSTN"                    means Public Switched Telephone Network.

1.31     "RADIO TRANSRECEIVER":    means the Radio Transmitter and Receiver at
                                   base stations.

<PAGE>

1.32     "REGULATIONS":            means the regulations issued by TRAI under
                                   TRAI Act, 1997 as amended from time to time.

1.33     "SERVICE AREA"            means the specified territorial telecom
                                   circle bounded by geographical limits within
                                   which the ILDO is licensed to operate and
                                   offer the Service.

1.34     "SERVICE PROVIDERS"       means telecom service provider licensed
                                   under Section 4 of the Indian Telegraph Act
                                   1885 for provisions of service.

1.35     "SHORT DISTANCE
CHARGING AREA (SDCA)":             means one of the several areas into which a
                                   Long Distance Charging Area is divided and
                                   declared as such for the purpose of charging
                                   for trunk calls and within which the local
                                   call charges and local numbering scheme is
                                   applicable. SDCAs, with a few exceptions,
                                   coincide with revenue tehsil / taluk.

1.36     "SHORT DISTANCE
CHARGING CENTRE (SDCC)":           means a particular Exchange in a Short
                                   Distance Charging Area declared as such for
                                   the purpose of charging trunk calls.
                                   Headquarters of SDCAs are generally SDCCs.

1.37     "TDSAT":                  means Telecom Disputes Settlement and
                                   Appellate Tribunal.

1.38     "TEC":                    means Telecom Engineering Center.

1.39     "TRAI"                    means Telecom Regulatory Authority of India

1.40     "VSNL"                    means Videsh Sanchar Nigam Limited.

1.41 The following abbreviations shall bear the full expression as mentioned
below:

ACM                                ADDRESS COMPLETE MESSAGE

ANM                                ANSWER MESSAGE

BHCA                               BUSY HOUR CALL ATTEMPTS

CAS                                CHANNEL ASSOCIATED SIGNALING

CCS7                               COMMON CHANNEL SIGNALING NO.7

CON                                CONNECT MESSAGE

CG                                 CALL PROGRESS MESSAGE

CRG                                CHARGING MESSAGE

DPC                                DESTINATION POINT CODE

ISD                                INTERNATIONAL SUBSCRIBER DIALING

I/C                                INCOMING

LDCA                               LONG DISTANCE CHARGING AREA

<PAGE>

NW                                 NETWORK

O/G                                OUTGOING

OPC                                ORIGINATION POINT CODE

SDCA                               SHORT DISTANCE CHARGING AREA

SDCC                               SHORT DISTANCE CHARGING CENTRE

SPC                                SIGNALING POINT CODE

SDH                                SYNCHRONOUS DIGITAL HIERARCHY

STD                                SUBSCRIBER TRUNK DIALING

TEC                                TELECOMMUNICATION ENGINEERING CENTRE

TAX                                TRUNK AUTOMATIC EXCHANGE

TS                                 TIME SLOT

<PAGE>

                                   ARTICLE-2

TECHNICAL ISSUES PERTAINING TO INTERCONNECTION:

2.1      INTERCONNECTIVITY

2.1.1    Both MTNL and the ILDO, shall :

                  a.   Interconnect their respective Networks to the Network
                       facilities of the other ; and

                  b.   make available to each other the services, facilities and
                       information as specified in this Interconnect Agreement.

                  c.   Provide the other interconnected party with
                       interconnection traffic carriage and fault detection of a
                       technical and operational quality that is equivalent to
                       that which each party provides to itself.

2.1.2                  ILDO may develop its own independent network, with its
                       own transmission links within its service area for
                       interconnecting with various NLDOs/ APs.

2.1.2.1                ILDO's network shall have interconnectivity with MTNL's
                       network at the Level-I TAX/Tandems/local exchanges
                       located at the location of approved International Gateway
                       Switch of the ILDO. This interconnectivity shall be for
                       following types of calls:

                       (a)  Incoming calls to India, which are originated by the
                            subscribers of public networks in other countries,
                            dialed as per ITU approved numbering plan and are
                            meant for terminating in the networks of licensed
                            telecom service providers in India.

                       (b)  Outgoing calls originated by the subscribers of
                            licensed service providers in India, which are
                            dialed as per the national numbering plan i.e. 00 +
                            country code + Area code + subscriber number, and
                            handed over by MTNL to ILDO for further carriage and
                            termination in the country of destination.

2.1.2.2                This connectivity shall not be used for handing over the
                       calls originated in India for termination on subscribers
                       of INMARSAT, GMPCS or other similar services as the
                       tariff and revenue share arrangement are different.

2.1.2.3                For calls other than those mentioned in clause 2.1.2.1
                       above, the arrangement shall be discussed separately to
                       arrive at a mutual agreement.

2.1.3                  ILDO's network shall have interconnectivity with MTNL's
                       network equivalent level at a tandem exchange for
                       incoming ILD calls terminating in MTNL's network..
                       However, if traffic requirement so necessitates, or if
                       connectivity at tandem level is technically non feasible,
                       ILDO shall seek interconnection at local exchange also.
                       For out going calls from the network of MTNL, ILDO shall
                       have connectivity at all level-1 TAXs at Delhi & Mumbai.

2.1.4                  ILDO shall be responsible for providing the required
                       transmission links from/to its network to/from MTNL's
                       network at interface points under Clause 2.1.3, at
                       local/tandem/ TAX levels, initially as well as for
                       augmentation from time to time. These links would include
                       passive transmission links as well as active end
                       equipments.

2.1.5                  ILDO shall not, under this agreement, directly or
                       otherwise, extend any type of service to MTNL subscribers
                       other than what is provided in the agreement through the
                       access provided by MTNL & vice versa unless otherwise
                       mutually agreed.

<PAGE>

2.1.5.1                ILDO shall deliver incoming traffic for termination in
                       MTNL's Network only via the POIs with MTNL and shall not
                       deliver such traffic through any other service provider
                       or through any other means unless mutually agreed or
                       permitted by the regulation.

2.1.6                  Unless otherwise expressly agreed between the parties the
                       scope of this interconnect agreement is limited only to
                       such traffic that originates or terminates in the network
                       of MTNL.

2.1.7                  The ILDO shall ensure that its interconnect facilities
                       delivered at each point of interconnection (POI) conform
                       to the applicable quality of service (QOS) standards and
                       technical specifications for interconnection by the
                       relevant delivery date determined pursuant to the
                       provisions of this agreement. Both the parties shall
                       exchange only toll quality voice telephony services at
                       the point of interconnection.

2.1.8                  ILDO shall be responsible to provide, install, test, make
                       operational and maintain all interconnection facilities
                       on its side of point of interconnection (POI) unless
                       otherwise mutually agreed.

2.1.9                  ILDO shall not transit the traffic originated from
                       network of any other service provider or operator through
                       MTNL unless mutually agreed.

2.1.10                 Switching system to be used by ILDO shall be interface
                       approved against the relevant latest TEC specification.

2.1.11                 Any facility obtained by ILDO from MTNL shall not be
                       resold or leased in any manner to a third party.

2.1.12                 No by pass of traffic shall be resorted to by any party
                       by delivering the traffic at any point other than as
                       permitted or agreed to under this agreement. In case
                       unauthorized diversion in routing comes to notice, the
                       other party shall be free to disconnect the POI in that
                       area, after intimating other party two weeks in advance.
                       Moreover, the resources shall be used for the purpose for
                       which these have been earmarked and no other service
                       shall be offered by utilizing such resources without
                       agreement of other party.

2.1.13                 Irrespective of who owns a transmission system of the
                       link interconnecting one party's exchange to the exchange
                       of the other party, each party subject to availability
                       and feasibility may provide accommodation for the
                       terminals of such equipment of the other party located in
                       its premises. Each party may permit mounting of antennae
                       for interconnect link owned by the other party on its
                       transmission towers subject to feasibility. Rental for
                       use of such space and mounting shall be determined by the
                       provider of such facility. Arrangements for installation,
                       operation and maintenance of such equipment will be
                       arrived at by mutual agreement. MTNL will provide the
                       services for maintenance & operation of interconnect end
                       link equipment at its end on chargeable basis on mutually
                       agreed terms & conditions.

2.2                    INTERCONNECTIVITY FOR INTRA SDCA

2.2.1                  Wherever the originating/terminating traffic to and from
                       TAX/ tandem exchange of MTNL justifies more PCMs, ILDO
                       will seek for augmentation in the POI from MTNL.

2.2.2                  Wherever the originating and terminating traffic to and
                       from a gateway switch of ILDO justifies more than 8 PCMs
                       for a particular local exchange of MTNL, the ILDO shall
                       seek direct interconnectivity with that exchange from
                       MTNL.

2.3                    CALLS FROM MTNL NETWORK/SUBSCRIBER TO ILDO'S NETWORK AND
                       VISE VERSA.

<PAGE>

2.3.1                  Calls from MTNL's subscriber or MTNL's network to ILDO's
                       network will be routed in the MTNL network up to the
                       farthest point i.e. up to MTNL's designated TAXs with
                       which ILDO has established its POI for further carriage
                       by ILDO through its approved international gateway
                       switch. ILDO shall accept outgoing ISD call for all the
                       countries at each of such POIs. Similarly the ILDO will
                       deliver the incoming international calls for various
                       directions at the designated tandems/local exchange with
                       which ILDO has established its POI. Routing details for
                       incoming calls to different POIs will be finalized by
                       MTNL & given to the ILDO for implementation in its
                       switch.

2.3.2                  Transit calls which ILDO desires to transit through MTNL
                       and meant for termination in network of any other service
                       provider will be allowed as per terms and conditions
                       given in Schedule-1 subject to agreement for the same
                       between the three parties i.e. ILDO, MTNL and terminating
                       service provider to be recorded in writing.

2.4                    INTER-CONNECT LINK ARCHITECTURE

2.4.1                  TRANSMISSION MEDIA

2.4.1                  (a)     All transmission systems shall be of the digital
                       type and shall, in case they are asynchronous, follow or
                       be inherently compatible with 2/8/34/140 Mb/sec.
                       hierarchy as per ITU-T G 703 Recommendation. Further, SDH
                       systems as per ITU-T G.708 recommendation will also be
                       permitted.

2.4.1                  (b)     Use of DXX (Digital Cross Connect) or equipment
                       with similar functionality is not permitted on links
                       connected with MTNL. Provided, however, that it shall not
                       preclude use of SDH equipment on point to point basis
                       between VSNL ILD Gateway and interconnecting SDCC
                       exchange of MTNL. If bandwidth compression techniques,
                       which reduce the bit rate of a voice channel less than 64
                       Kb/Sec., are used, in the network of ILDO it shall
                       provide conversion equipment for 64 Kb/sec. at the
                       interface points with MTNL's switching and transmission
                       systems. It is however, agreed that no bandwidth
                       compression techniques shall be used on Interconnection
                       transmission links between ILDO's network and MTNL's
                       network unless mutually agreed.

2.5                    NETWORK INTERFACE

                       The inter-working between MTNL network and ILDO's network
                       shall be at 2 Mb/sec. PCM following relevant latest TEC
                       specification. No analogue connectivity shall be
                       permitted.

2.5.1                  SIGNALING

2.5.2                  (a)     In all cases where MTNL exchange supports CCS7,
                       the signaling with the ILDO's exchange shall be CCS7 (in
                       compliance with National CCS7 & TEC specifications for
                       local/tandem working as modified from time to time. For
                       CCS7 calls, if the charge indicator parameter in
                       ACM/ANM/CPG/CON is received as "NO CHARGE", MTNL and ILDO
                       reserve the right to reject the call.

2.5.3                  (b)     For CCS7 inter-working, the coding of Originating
                       Point Code (OPC) and Destination Point Code (DPC) and
                       Signaling Link Selection (SLS) shall be based on national
                       CCS plan as revised from time to time.

2.5.4.                 (c)     TS '0' shall be used for synchronization and TS
                       `16' shall be used for the purpose of signaling.

                       (d)     Unused bits in TS '0' of the frame, not used for
                       frame alignment, shall be set to 1. Similarly, unused
                       bits in TS '16' of the frame 0, which is used for
                       multi-frame alignment work, shall be set to 1.

<PAGE>

2.5.3                  (e)     Basic error correction (layer 2) method shall be
                       used.

2.5.3.                 (f)     MTNL's signaling network shall be used only for
                       such calls for which voice path is being established
                       through MTNL's network. Messages on CCS7 links shall
                       remain limited to mandatory messages, which relate to
                       call set up and release.

2.6                    TRAFFIC

                       The traffic on the junction between the MTNL Exchange and
                       the ILDO Exchange shall be taken as per Clause 1.2.3.2 of
                       Volume I Section A Chapter 1 of G/LLT-01/03 Sept.95 as
                       amended from time to time.

2.7                    SYNCHRONISATION

                       ILDO shall be responsible for synchronizing his Exchange
                       with MTNL's Exchange. The Synchronization arrangement and
                       equipment of the ILDO's Exchange shall comply with Clause
                       4 of TEC specification No.G/PNI-03/01 Sept.95 as modified
                       from time to time. Information regarding priority of
                       different input clocks shall be given by MTNL to the
                       ILDO.

2.8                    TESTING OF JUNCTIONS

                       ILDO's Exchange shall provide the facility of junction
                       testing as per Clause 10.3 of volume II, Section C
                       Chapter 10 of G/LLT-01/03 Sept.95 as modified from time
                       to time .

2.9                    ALLOCATION OF PERFORMANCE PARAMETERS

2.9.1                  CCS 7 performance parameters shall conform to the
                       National CCS7 Plan R/NSP-01/01 Sep. 94.

2.9.2                  All transmission, parameters apportioned for the network
                       operator portion of the call shall comply with National
                       Transmission Plan. Parameters not specified in
                       Transmission Plan shall comply with ITU recommendations.

2.10                   NETWORK INTERCONNECTIVITY

2.10.1                 DIVERSITY

2.10.1                 (a)     Analogue routing shall not be permitted.

2.10.1                 (b)     All traffic routes to the extent possible shall
                       be supported by at least two CCS7 links. Each link shall
                       be provided in a separate 2048 Kb/sec. System

2.10.1                 (c)     Provision of number of interconnect links in a
                       particular direction shall be dimensioned for a grade of
                       service as specified by MTNL or TEC from time to time.
                       However, any additional interconnect links required by
                       the LICENSEE can be provided by MTNL, subject to
                       technical feasibility. All the interconnect links shall
                       be provided as per the rates prescribed in Chapter 6
                       subject to change from time to time.

2.10.2                 CIRCUIT SELECTION

                       In the event that both way working is agreed between the
                       parties, the circuit selection protocols shall conform to
                       National CCS 7 specification as amended from time to
                       time.

<PAGE>

2.11                   NUMBERING PLAN

2.11.1                 ILDO has been allocated carrier selection code by the
                       LICENSOR for dynamic selection of carrier for
                       International long distance calls. All calls for which
                       dynamic carrier selection code has been dialed shall be
                       routed accordingly subject to technical feasibility.

2.11.2                 All the digits received from calling party including '0'
                       shall be passed across the interface (ROD=1).

2.12                   CALLING LINE IDENTIFICATION

2.12.1                 ILDO's network shall be capable of transmitting and
                       receiving calling line identification, which shall
                       include Area code and subscriber number.

2.12.2                 Malicious call line identification shall be transported
                       across the network as required by Law Enforcing Agency
                       subject to technical feasibility.

2.12.3                 Disclosure of identity of calling line will be subject to
                       provisions of law and this facility will be made use of
                       for technical, commercial and administrative requirements
                       as prescribed by the Licensor from time to time.

2.13                   CCS7 SIGNALLING POINT (SP) CODE ASSIGNMENT

                       The ILDO may develop its CCS7 signaling network. MTNL
                       will allocate SP Code for the signaling nodes that will
                       be used for Points of Interconnection. The allocation of
                       SP Codes for all other CCS7 signaling nodes within the
                       ILDO's network will be decided by the LICENSOR.

2.14                   USE OF HIGHER LAYER PROTOCOLS

2.14.1                 Where telecommunication services require higher layer
                       protocols for interworking/interfacing, it shall be
                       discussed and an agreement shall be arrived at
                       separately.

2.15                   NETWORK INTEGRITY AND SCREENING

2.15.1                 ILDO shall be responsible for preventing the transmission
                       of any signaling message across the connecting network,
                       which does not comply with, inter working specification
                       of TEC No.G/PNI-03/01 Sept. 95.

2.15.2                 Efficient arrangement for screening function shall be
                       established by the ILDO at his Gateway exchange in his
                       network to detect signals outside the inter-working
                       specification of TEC No.G/PNI-03/01 Sept.95 referred
                       above as modified from time to time.

2.15.3                 Screening arrangement shall include rejection of
                       communications or discarding information fields, which do
                       not comply with the specification. It will be the
                       responsibility of the ILDO/MTNL that network integrity is
                       protected and maintained.

2.16                   PROTECTION

                       It shall be ensured that in case the transmission of
                       voice signals to MTNL/ILDO network requires power
                       feeding, then not only the safety of the equipment shall
                       be ensured but also of the personnel maintaining it. In
                       this regard, safety requirements of accidental human
                       touch of feeding voltage as prescribed in BIS document
                       No. IS 8437 shall be referred for limits.

<PAGE>

                                   ARTICLE - 3

                              INTERCONNECT CAPACITY

TRANSFER OF INFORMATION, DATA AND FORECASTING FOR TIMELY PROVISIONING OF
SERVICES

3.1                    CAPACITY ORDERING

3.1.1                  Demands/Forecasts of either party i.e. MTNL and ILDO, on
                       the other for the following shall be firmed up at least
                       12 months* before the date on which the required
                       connectivity or circuits is/are required.

                            i)   number of ports (2048 kb/sec digital trunks)
                                 and type of signaling in the telephone
                                 exchanges, location-wise.

                            ii)  addition to the traffic capacity of the
                                 exchanges in Erlangs and call handling capacity
                                 in BHCA.

                            iii) number of exchanges and signaling capacity to
                                 be connected over CCS7 signaling.

                            iv)  Routewise expected traffic dispersion.

                       * Provided that this time frame shall be six months for
                       demand made for the first occasion in the first year of
                       License period. However, this does not preclude the
                       possibility of earlier provisioning of the interconnect
                       capacity in full or in part subject to technical
                       feasibility and availability.

3.1.2                  The requirements mentioned in Para 3.1.1 shall be
                       furnished in the prescribed Performa given in Annexure 2
                       hereto.

3.1.3                  As stated in Article 2.1.4 and as per Article 6.1.1
                       herein below, ILDO shall be responsible for providing the
                       required transmission links to and from MTNL's network at
                       permitted interface points at local/tandem/TAX levels
                       initially as well as for augmentation from time to time.
                       However, in case ILDO requests MTNL in writing to provide
                       such links, to interconnect ILDO's network to MTNL's
                       network, then MTNL, may accept such request and set up
                       the link upon payment of charges as may be prescribed by
                       MTNL from time to time.

3.1.4                  The party receiving the interconnect capacity demand
                       shall intimate, within a period of 30 days from the date
                       of receipt of appropriate demand, either the acceptance
                       or otherwise an alternative proposal for meeting this
                       demand. In case no response is made within 30 days, it
                       will be treated as accepted demand and interconnection
                       seeker shall be free to deposit the prescribed amount for
                       the required number of ports.

3.1.5                  After the acceptance of interconnect capacity demand, in
                       full or part, MTNL will issue a bill based on the
                       accepted interconnect capacity demand, calculated as per
                       Article 6, within 30 days to the ILDO for the advance
                       charges for the first year's use of connection. The ILDO
                       shall pay such bill within 30 days of the date of issue
                       of bill failing which, MTNL will not be obliged to
                       provide the interconnect capacity.

3.1.6                  The above stated interconnect capacity demand will be
                       treated as firm demand from the date of receipt of the
                       first year's advance payment of the port charges. The
                       advance payment thus received by MTNL from ILDO will be
                       adjusted against the first year's (reckoned from the date

<PAGE>

                       of actual provision of connection to the ILDO) port
                       charges for the connections, calculated as per Article-6.
                       In subsequent years, the annual connection charges for
                       the link connections will be paid each year in advance by
                       ILDO.

3.2                    CAPACITY ORDER TIME SCALE

3.2.1                  The time scale for the provision of capacity Ready For
                       Testing shall be 12 months following the date of receipt
                       of the firm demand. However, in exceptional cases, a
                       longer or a shorter time frame can be mutually agreed.

3.2.2                  The ILDO shall ensure that the interconnect capacities
                       are got tested within 30 days of the date these are made
                       available by MTNL and these capacities are used fully
                       within a period of three months from the date of
                       commissioning. After expiry of six months extendible to
                       nine months on request, the demand shall be deemed to be
                       withdrawn at the option of MTNL if these are not put to
                       full use by ILDO and MTNL shall be free to use these
                       capacities as required.

3.3                    LIQUIDATED DAMAGES

3.3.1                  After placement of a firm demand to provide the
                       interconnect capacity, if MTNL fails (otherwise than
                       through an act of omission of the ILDO) to make available
                       the connection on a ready for test date within a period
                       of 12 months (or any other mutually agreed time frame)
                       from the date of receipt of advance payment as in Para
                       3.1.5 and 3.1.6 above, then MTNL shall pay, on demand, to
                       ILDO, LIQUIDATED DAMAGES for such delays calculated as
                       follows:

         (a)           i)       0.5% of annual connection charge calculated for
                       each PCM link/port as per clause 6.3.1 (a) & (b)/(c) of
                       Article 6 for the number of connections not made
                       available on the ready for test date as per the relevant
                       firm demand multiplied by number of days following the
                       ready for test date till the required connections are
                       made available for ready for test.

                       iii)     For the purpose of calculation of Liquidated
                       Damages, the said quantum of delay in provision of
                       connections, shall be reckoned from the date of expiry of
                       12 months period from the date of receipt of advance/firm
                       demand up to the actual date of issue of notification
                       certifying that such capacity is ready for testing.

                       Illustration: -

                       Where,

                       i)   Annual Link
                            charges         = Rs.1000 per annum per link

                       ii)  No. of links
                            required        = 20

                       iii) No. of links
                            provided by
                            Ready for test
                            date            = 15

                       iv)  Balance links
                            provided 12
                            days after
                            ready for
                            test date       = 5

                       v)   Amount of L/D
                            charges         = (1000 x 0.5 x 12 x 5)/100 = Rs.300

         (b)           The maximum number of days for which the liquidated
                       damages are payable is limited to 30 days.

<PAGE>

         (c)           The payment of liquidated damages shall not release the
                       MTNL from the obligation to deliver the ordered
                       connections to the ILDO. In exceptional cases where the
                       delay is beyond 30 days, MTNL shall be liable to explain
                       the reasons to ILDO and also to indicate the revised
                       ready for test date.

3.3.2                  In those cases where interconnection links are being
                       provided by ILDO and ILDO fails (otherwise than through
                       an act of omission of MTNL) to make available connections
                       on the ready for test date i.e. 12 months (or mutually
                       agreed time frame) from the date of advance payment of
                       port charges to MTNL, then ILDO shall pay, on demand, to
                       MTNL the liquidated damages for such delays calculated as
                       follows:

         a)            0.5% of annual port charges calculated for each port as
                       per clause 6.2.1 of Article 6 for the number of
                       connections not made available on the ready for test date
                       as per relevant firm demand multiplied by the number of
                       days following the ready for test date, till the required
                       connections are made available for ready for test.

         b)            The maximum number of days for which the liquidated
                       damages are payable, is limited to 30 days.

         c)            The payment of liquidated damages shall not release the
                       ILDO from the obligation to deliver the requisite
                       connections/links.

3.4                    CANCELLATION OF FIRM DEMAND

3.4.1                  ILDO may cancel a firm demand made for interconnections
                       required by him at any time prior to ready for test date,
                       by a written notice to MTNL. In the event of cancellation
                       of an order for interconnection more than 30 days after
                       its placement, ILDO shall pay cancellation charges to
                       MTNL as provided in Annexure- 3 hereto.

                       The amount deposited by ILDO in accordance with clause
                       3.1.6 above for provision of connections for the relevant
                       capacity firm demand shall be refunded to ILDO after
                       deducting appropriate cancellation charges.

3.5                    REMOVAL AND CESSATION OF INTERCONNECT CAPACITY

3.5.1                  Either party may place a written order on the other for
                       the removal and cessation of interconnect capacity.

3.5.2                  If ILDO requires the removal of, in part or in full,
                       interconnect capacity already provided under this
                       agreement then an order (in short "removal order") shall
                       be placed on MTNL to that effect. MTNL will in turn
                       verify the requirement and remove the capacity within 30
                       days (or mutually agreed time frame) from the date of
                       receipt of the removal order.

                       If MTNL after receiving the request disagrees with the
                       proposed removal, then the capacity will not be removed
                       until joint agreement is reached in accordance with the
                       dispute resolution procedure as laid down in Article 8.

3.5.3                  A removal certificate will be issued by MTNL to ILDO for
                       the removed capacity within one month of the completion
                       of the removal work.

3.5.4                  The cost of removal of such capacity thus agreed upon, as
                       payable by ILDO to MTNL shall be as prescribed in
                       Article-6 in respect of such capacity. In the case of
                       links provided on Rent & Guarantee basis, the prevalent
                       terms and conditions of MTNL for Rent & Guarantee cases,
                       will apply.

<PAGE>

3.6                    TRAFFIC FORECAST

3.6.1                  The content of the traffic forecast shall be as follows:-

                       -    Traffic from ILDO's to MTNL (For each tandem/local
                            exchange of MTNL)

                       -    Traffic from MTNL to ILDO's network

3.6.2                  Each traffic forecast shall contain

                       -    BHCA.

                       -    Busy hour Traffic in Erlangs.

3.6.3                  Busy hour may vary for various exchanges and it shall be
                       determined from actual traffic figures in the network.

3.6.4                  The traffic figures indicated in the forecast shall be
                       reviewed after the implementation of the ILDO's network
                       on monthly basis. Both parties shall provide traffic
                       report on all trunk groups used for interconnection.

3.7                    ENHANCEMENT OF STANDARDS AND FEATURES

3.7.1                  If any change in MTNL's / ILDO's network/system is
                       introduced to comply with international standards and
                       national standards or for any other reason mutually
                       agreed to, costs associated with such changes that either
                       party has to make in its network/system to maintain
                       interconnectivity with other's network shall be borne by
                       the respective parties.

3.7.2                  Normally the altering party shall notify in writing at
                       least 12 months in advance setting out details of the
                       nature, effect, technical details and potential impact on
                       the other party's system of such alteration. A notice
                       period shorter than 12 months can also be considered in
                       exceptional circumstances by mutual agreement.

3.7.3                  Either party requiring enhancement of features in
                       switching and transmission systems to meet new or
                       unforeseen situations and demands shall notify the other
                       party at least 12 months in advance.

<PAGE>

                                   ARTICLE - 4

         TESTING AND COMMISSIONING OF INTER CONNECT CIRCUITS

4.1                    TESTING TIME TABLES.

4.1.1                  The party installing the equipment and requiring
                       inter-connectivity tests shall, before the Ready For Test
                       date, notify to the other party certifying that such
                       capacity is ready for testing.

4.1.2                  MTNL and ILDO shall commence joint testing of
                       interconnect circuits within one month after the relevant
                       Ready For Test Date. The format for Ready For Test
                       intimation shall be designed in consultation by both the
                       parties i.e. MTNL and ILDO. The result of joint testing,
                       recorded by duly authorized representatives of each side,
                       shall be binding on both the parties.

4.1.3                  If, for good reason, either party is unable to proceed
                       with testing of any interconnect circuit, then that party
                       shall notify the other in writing at least 10 working
                       days prior to scheduled Ready For Test date where after
                       testing will be rescheduled by mutual agreement and
                       testing carried out on such rescheduled date.

4.1.4                  If the parties are unable to agree upon a mutually
                       acceptable date for the testing of the interconnect
                       circuits, then either party may notify the other that it
                       wishes to resolve the disagreement in accordance with
                       Article 8 and in such an event the dispute resolution
                       procedure set out in that chapter will come into
                       operation.

4.1.5                  On the Ready For Service Date, both parties will certify
                       to confirm that the interconnect circuits have been
                       satisfactorily tested and are ready for putting into
                       service Such certificate will be worded as mutually
                       agreed by both parties so far practicable.

4.2                    TESTING AND COMMISSIONING PROCEDURES

4.2.1                  MTNL shall provide the test schedule to ILDO, within 20
                       working days of a written request by the ILDO.

4.2.2                  Details of testing procedure format/Guidelines will be as
                       mutually agreed. The parties will jointly test the
                       equipment to ensure that the equipment meets the
                       necessary technical parameters and performance standards
                       in a reasonable and efficient manner.

4.2.3                  Testing time scales will vary according to the capacity
                       ordered and the relevant testing scenario shall be
                       developed in advance by MTNL.

4.2.4                  In Case MTNL shall require and demand any testing
                       equipment / facilities from ILDO to carry out required
                       interconnect tests, the same shall be provided by ILDO.

<PAGE>

                                   ARTICLE - 5

                       INTERCONNECT PERFORMANCE STANDARDS

5.1      GENERAL

         i.       Each party shall be responsible for running its own system and
                  ensuring the safety of such system.

         ii.      Fault reporting mechanism for interconnect operational
                  problems will be initially worked out jointly by both the
                  parties and this mechanism shall be upgraded from time to
                  time.

5.2      FAULTS IDENTIFICATION AND REPORTING

         i.       Each party shall advise its customer to report all faults to
                  its own Fault Reporting Center.

         ii.      If a customer of one party reports a fault to the Fault
                  Reporting Center of the other party to which it is not
                  directly connected, such latter party will promptly inform the
                  customer of the correct number to report the fault.

         iii.     If a major fault occurs which is likely to affect systems of
                  both parties, the party who first becomes aware of the fault
                  shall promptly notify the fault to the other.

         ii.      If one party identifies a fault occurring in its system, which
                  may have adverse effect on the other party's system, the first
                  party will promptly inform the party of the actions being
                  taken to resolve the problem.

5.3      NETWORK RESTORATION

                  The parties will develop and record (to form operating
                  instructions) a series of agreed response time for different
                  network fault conditions on the basis of following principles:

                  i)       Clearance of faults affecting the network will take
                           priority over the clearance of individual faults.

                  ii)      They will automatically bring in any standby capacity
                           available and/or carry out network management actions
                           to restore service to the extent feasible.

                  iii)     They will observe equipment alarms and carry out
                           testing to identify the nature and location of the
                           fault in co-operation, as deemed necessary, with the
                           other party.

                  iv)      They will keep each other informed of progress on a
                           regular basis.

                  v)       If temporary repairs are made by one, the other party
                           must be informed of this fact. Other party shall also
                           be informed of service impact of temporary repair and
                           the estimated time of full restoration.

5.4      PLANNED MAINTENANCE/WORKS

                  i)       Each party will give at least 7 days notice of any
                           planned maintenance, which may affect the other's
                           system.

<PAGE>

                  ii)      Each party shall make its best efforts to minimize
                           disruption and where possible alternative routing
                           will be provided. Equipment design and link
                           engineering should have such redundancy that for any
                           planned work the traffic is not severely affected.

5.6      REVIEW MEETINGS

5.6.1             Review meetings shall be held normally at an interval of 4
                  months at appropriate level at the headquarters of the ILDO's
                  or at the MTNL Delhi /Mumbai Circle Head Quarter, to sort out
                  various interconnect and network related problems affecting
                  the interconnectivity.

<PAGE>

                                   ARTICLE - 6

                             INTERCONNECTION CHARGES

6.2                      INTERCONNECTIVITY TO MTNL NETWORK.

6.2.1             Provision of links to interconnect ILDO's network with MTNL's
                  network at the technically feasible interconnecting exchange
                  will be the responsibility of the ILDO as provided under
                  Clause 2.1.2 and 2.1.4.

6.2.2             The cost of terminating equipment including measurement
                  devices in the TAX/Tandem/Local switch for measurement of
                  traffic/revenue share, specifically asked for by ILDO shall
                  be payable by ILDO.

6.2.3             The set up of cost of interconnection which means the initial
                  cost of any engineering work needed to provide the specific
                  interconnect facilities requested by ILDO shall be payable by
                  the ILDO. A set up cost of Rs. One lakh per POI per occasion
                  will be paid by ILDO to MTNL for creation, testing and
                  commissioning of the POI.

6.2               CONNECTION CHARGES

6.2.1             It shall not be mandatory for MTNL to provide any
                  infrastructure to ILDO which ILDO itself is supposed to
                  arrange. MTNL, however, may subject to availability and its
                  commercial policies provide PCM links to interconnect ILDO's
                  exchange to MTNL's exchange at SDCA level.

                           a)       For the initial period of three years, the
                                    port charges shall be payable by ILDO as per
                                    regulation No.6 of 2001 issued by TRAI and
                                    as amended from time to time. However, it is
                                    understood that no port charges shall be
                                    payable for ports already made available to
                                    ILDO by MTNL.

6.2.2             Minimum period of hire of the ports shall be three years. If
                  the ports are surrendered earlier, pro-rata rental for the
                  un-expired portion of the committed period shall be payable by
                  ILDO. Once the interconnect agreement comes into effect, the
                  rates in respect of the aforesaid components at (b) and (c) as
                  applicable on the effective date may remain fixed for the
                  capacity orders placed within 36 months from the date of
                  provisioning. However, as regards the aforesaid component at
                  (a) above, the rates as per MTNL terms prevalent at the time
                  of charging shall be applicable. In addition to these rates,
                  the ILDO shall bear the cost of setting of the
                  interconnection.

                  All infrastructure charges including leased line charges and
                  set up cost etc. are to be borne by ILDO as per MTNL
                  applicable tariffs. Where ILDO applies for E1 at any of its
                  international gateways for the purpose of POIs with the
                  designated gateway TAXs, TANDEMs, the payment of leased line
                  charges would be accepted on quarterly in advance basis. This
                  shall apply to first year leased line charges as well. Leased
                  line charges, if any, taken earlier on annual basis shall be
                  refunded/ readjusted by MTNL.

6.2.3             For the infrastructure referred to in Clause 2.1.13 like space
                  in MTNL's building, provision of power supply, air
                  conditioning, mounting of antennas on towers or building tops
                  if feasible for the interconnect link, the charges and other
                  terms & conditions for the same will be as prescribed by MTNL
                  from time to time separately.

6.2.4             Irrespective of what has been mentioned in Clause 2.1.13
                  permission to mount antennae or use of space/duct etc. for
                  interconnection link shall not be mandatory and will be
                  subject to availability keeping the long-term requirement of
                  each party in view and mutual agreement. The charges for such
                  accommodation and infrastructure shall be as prescribed by the
                  Interconnection Provider from time to time. The installation
                  of the link equipment may be done by the ILDO itself and no
                  independent room etc. will be provided by MTNL. The end link
                  equipment will be installed in the transmission room of the
                  building where interconnection will be taken by ILDO. After
                  commissioning of the end link equipment, the same shall be
                  taken over by MTNL for operation and maintenance and the staff
                  of the ILDO will not be

<PAGE>

                  allowed entry for day to day maintenance. The operation and
                  maintenance charges for end link equipment at MTNL end will be
                  charged from the ILDO along with the rental for space and
                  other infrastructure such as AC, power etc. MTNL will
                  undertake the operation and maintenance of interconnect
                  equipment installed by ILDO in its premises and will charge
                  the ILDO for the same. The entry of ILDO's personnel on a
                  regular basis shall not be allowed in MTNL's premises but
                  shall be for level II maintenance on need basis.

6.3               ACCESS CHARGES/REVENUE SHARING

6.3.1.            Access charges for Outgoing and Incoming international calls
                  shall be as per Schedule-I

6.3.2             REVIEW

                  The incoming and outgoing rates as above are valid until
                  31-03-2004. The review can also be done subject to following
                  events:-

         (i)      TRAI's determination/regulation on access charges revenue
                  sharing and interconnection arrangements with ILDOs.

         (ii)     In case of significant reduction of ILD customer tariff as
                  announced by other ILD operators.

         (iii)    The total outgoing traffic volumes exceeds the incoming volume
                  in any month.

         (iv)     CAC is introduced whereby the subscriber is able to directly
                  select the ILDO.

         (v)      Mutual agreement between the two interconnecting operators.

6.4               CHARGES FOR ENHANCEMENT OF FEATURES IN SWITCHING AND
                  TRANSMISSION SYSTEMS.

6.4.1             In case, any enhancement of features is required in the
                  network of MTNL for enabling interconnection and start of
                  services of the ILDO to meet the requirements of his license
                  for International Long Distance Service, the charges for such
                  enhancement shall be payable by the ILDO as determined by
                  MTNL. If these enhanced features are made use of by other
                  ILDOs within a period of 12 months from the date of such up
                  gradation, they will proportionately share this cost with the
                  earlier ILDO who has paid for it.

6.4.2             ILDO shall pay to MTNL the charges as decided by MTNL for the
                  cost of enhancement of features in its switching and
                  transmission networks and their up-gradation, if any, for
                  providing the specific facilities requested by the ILDO which
                  are not available with MTNL at the location of the POI.

<PAGE>

                                   ARTICLE - 7

                           INTERCONNECT BILLING SYSTEM

7.3               BILL INFORMATION

7.3.1             MTNL shall provide to the other party information relating to
                  detailed billing/trunk group bulk billing as may be reasonably
                  required for ascertaining the charges payable by each party
                  under this agreement on monthly basis.

7.3.2             In case of a dispute arising between the parties in respect of
                  the billing MTNL and the ILDO shall have the right on having
                  given an advance written notice of 10 clear days, to inspect
                  the relevant books and/or detailed records of the other
                  relating to a period not exceeding one year prior to the date
                  of inspection, for the purpose of verifying the Billing
                  information provided by the other in respect of such period.

7.3.3             Each party shall keep all books and records relating to
                  Billing Information provided by it to the other, in respect of
                  revenue sharing (access charges) for a period of one year from
                  the end of the Billing Period in respect of which such Billing
                  Information was delivered to the other. If a request has been
                  made as per provisions in 7.1.2 such records will have to be
                  preserved till final settlement of the case.

7.3.4             In the event that at any time during the continuance of this
                  Agreement the Billing System of either Party malfunctions and
                  is unable to provide all or part of the Billing Information
                  necessary for such party to prepare a bill to the other, the
                  other party shall at the request and expense of the first
                  mentioned party use its reasonable endeavors to supply the
                  necessary Billing Information to the first mentioned Party
                  without any legal liability to the first mentioned party for
                  the contents of such Billing Information.

7.3.5             ILDO shall be responsible to cover its liability for payment
                  of taxes imposed by the Central or State Government, as the
                  case may be.

7.4               ISSUE OF BILLS

7.4.1             Traffic observations and meter reading shall be taken at each
                  POI separately for outgoing calls, incoming calls and transit
                  calls. These meter readings shall be sent to the designated
                  billing authority who shall issue the bills for the net amount
                  after deducting the charges payable for the outbound traffic
                  and also taking into account the applicable volume discounts
                  and minimum monthly guaranteed incoming traffic. The bill
                  shall be issued on monthly basis and shall be payable within 7
                  day of the date of issue of bill or 15 days from the end of
                  month whichever is earlier. The payment shall be by way of
                  banker's check/demand draft in favor of the designated billing
                  authority of MTNL, drawn at the local branch of any scheduled
                  bank at Mumbai

7.2.2             Bills for telecom resources and other support facilities, such
                  as connection charges, charges for leased facilities and
                  charges for enhancement of features, if availed by the ILDO
                  will be issued by MTNL and paid by the ILDO at the intervals
                  specified in this agreement.

7.2.3             The meter reading and the traffic observations of each PoIs
                  shall be sent to the designated billing authority by each unit
                  in charge of PoI and one composite bill shall be issued by the
                  designated billing authority. The entire work regarding the
                  billing shall be under the control and supervision of the one
                  billing authority, which shall be under CGM-MTNL, Mumbai for
                  the PoIs located in the areas of Delhi as well as Mumbai. The
                  payment of the bills shall also be reconciled by the
                  designated billing authority under the CGM MTNL, Mumbai and
                  all actions regarding the billing and accounting shall be the
                  responsibility of designated billing authority.

<PAGE>

7.3               TERMS OF PAYMENT

7.3.1             MTNL and the ILDO agree that:

                  i)       The payment of bills will be made by the ILDO within
                           the time specified in Clause 7.2 above.

                  ii)      The mode of payment will be through banker's
                           Check/Demand Draft in favor of the designated
                           authority of MTNL, drawn at the local branch of any
                           scheduled bank at the place where such designated
                           authority of MTNL is located.

                  iii)     All payments due to MTNL will be paid without set off
                           (netting) or counter claim and shall be free and
                           clear of any withholding or deductions.

                  iv)      If the bill issuing authority subsequently finds that
                           some charges have been omitted from the bills issued,
                           he will include the omitted charges in the subsequent
                           bills at any time, but within 12 months from the date
                           of issue of the relevant bill. However, in cases
                           where additional billing becomes necessary due to the
                           tariffs/rates changes notified subsequently with
                           retrospective effect by the appropriate authority and
                           where the bills are issued on account of delay by
                           ILDO, there will be no time limit applicable for
                           raising such bills.

7.3.2             (i)      If due payment is not received within the specified
                           period outlined in the bill, MTNL shall have a right
                           to obtain payment through encashment of bank
                           guarantee which shall be provided by the ILDO in
                           favor of MTNL. The Bank guarantee will be en-cashed
                           in case of a default in payment by ILDO.

                  (ii)     The encashment of the bank guarantee shall not
                           detract in any manner, the MTNL from discontinuing
                           the use of its facilities by the ILDO after failure
                           in making due payment. Provided, before disconnecting
                           the said facilities, 30 day's notice shall be given
                           to the ILDO but such notice will not be construed to
                           have any link or connection with the encashment of
                           Bank Guarantee.

7.4               In the event of delayed payment by either Party, interest will
                  be charged on the due amount at the following rates:

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
         Period of Delay                             Interest Rate (per annum)
--------------------------------------------------------------------------------
<S>                                                  <C>
A.   For the first two occasions of delay:

     I     Delay of 15 days beyond the
           Due date                                             15%
     II    Delay beyond 15 days but up
           To the next 15 days                                  18%

B.   For the third & subsequent occasions
     of delayed payment:

     I.    Delay of 15 days beyond the
           Due date                                             18%*
     II.   Delay beyond 15 days but up to
           Next 15 days.                                        21%*
</TABLE>

<PAGE>

* Note:                This  stipulated  interest rate or the  prevailing  prime
                       lending rate of State Bank of India plus 5% (Five
                       percent) per annum (compounded monthly), which ever is
                       higher, shall be applicable.

Explanation

                       The interest referred above will also be applicable in
                       case the bill is disputed but subsequently it is found to
                       be in order by the appropriate authority.

7.5               SETTLEMENT OF DISPUTES REGARDING WRONG/EXCESS BILLING:

7.5.1             The bills issued by MTNL based on bulk record shall be final.
                  In case of difference up to 0.25%+/- with the billing record
                  of ILDO, the amount billed by MTNL shall be treated as final.
                  If the difference is more than +/- 0.25% but up to +/
                  -2%payment shall be made by ILDO. However, reconciliation of
                  variance shall be carried out by both parties and will be
                  subject to dispute resolution mechanism. Variance beyond this
                  limit shall be subject to dispute resolution mechanism as
                  specified in the Interconnect Agreement. However, ILDO shall
                  pay to MTNL the undisputed amount plus 50% of the disputed
                  amount subject to a minimum of an amount equal to previous
                  month's billed amount immediately.

7.5.2             In the event ILDO disputes the accuracy of a bill delivered by
                  MTNL pursuant to this Agreement, it will, as soon as
                  practicable, but in any case before the pay-by-date notify the
                  billing liaison contact of MTNL of the nature and extent of
                  the dispute along with all details reasonably necessary to
                  substantiate its claim, which shall be reasonably capable of
                  being verified by MTNL.

7.5.3             In case of calculation or clerical error in the bill, the bill
                  issuing authority after verifying the bill, if it finds the
                  errors genuine, will correct the relevant bill accordingly
                  within three days of the receipt of the complaint.

7.5.4             In cases other than those referred in clause 7.5.3, ILDO shall
                  immediately obtain a provisional bill from MTNL before the pay
                  by date of the original bill on the basis given in clause
                  7.5.1. The provisional bill shall be paid by the ILDO before
                  the pay by date indicated in the provisional bill. Thereafter,
                  within 7 days of the issue of the provisional bill, the ILDO
                  shall approach the designated authority of MTNL along with all
                  his relevant records based on which the ILDO disputes the bill
                  issued by MTNL. The ILDO shall, in consultation with the
                  designated authority of MTNL, settle the dispute within 15
                  days of the issue of the provisional bill referred in this
                  clause. In this consultation, the records made by the
                  measurement devices located at the MTNL interface point shall
                  have precedence over the records of the ILDO. If after
                  consultation, it is found that the bill issued by MTNL is
                  correct, the balance amount of the bill, which was kept under
                  dispute after the issue of the provisional bill), will also
                  have to be paid by the ILDO within 7 days of the settlement of
                  such dispute.

7.5.5             After the settlement of the dispute, if balance of the due
                  payment is not made within the period referred to in clause
                  7.5.4, the MTNL shall discontinue the use of its facilities by
                  the ILDO immediately on occurrence of this default. For this
                  purpose all bills raised on ILDO shall serve the purpose of
                  notice also and no separate notice for disconnection of
                  facility will be required to be issued by MTNL. Restoration of
                  the facility will be made only on clearance of the dues
                  payable by the ILDO.

7.5.6             (i)      Notwithstanding provided herein above, if the dispute
                  over the accuracy of the bill fails to be resolved, in the
                  manner already provided, the dispute shall be referred to the
                  arbitrator appointed as per the provisions of clause 8.1 of
                  this Agreement whose decision shall be final and binding.

                  (ii)     Each party shall continue to fulfill its obligations
                  under the Interconnect Agreement during the pendency of
                  dispute and while dispute resolution process invoked under sub
                  Para (i) above except that MTNL shall not be obliged to
                  continue to provide and / or restore the interconnect services
                  when all due payments are not made by the ILDO.

<PAGE>

                  (iii)    Any party shall not use any information obtained from
                  other party during the course of dispute resolution process
                  under this clause for any purpose other than to resolve the
                  dispute and such information shall not be used in litigation.

7.6               BANK GUARANTEE

                  The bank Guarantee as the case may be for the payment of
                  billed amount is to be submitted for each POI, separately.
                  However, to avoid delay it is agreed that ILDO shall furnish a
                  bank guarantee for Rs 6 crores valid for one year to Corporate
                  Office MTNL in Delhi to cover the payment of due amount.

                  Later based on average monthly billing for the period of 4th
                  ,5th and 6th months for each POI, the bank guarantee equal to
                  2 months average billed amount as above shall be provided
                  separately to the designated billing authority of MTNL for
                  each POI. Upon receipt of Bank guarantee as above, the
                  original bank guarantee shall be released. The requisite
                  performa, term and condition for the bank guarantee are
                  enclosed as Annexure- 5

<PAGE>

                                   ARTICLE - 8
                            DISPUTES AND ARBITRATION

8.2      DISPUTES OTHER THAN BILLING DISPUTES

8.2.1             Both parties shall use their best efforts in good faith and
                  best intention to resolve a dispute other than billing dispute
                  by mutual negotiation and consultation and shall settle
                  amicably any dispute that may arise or relate to this
                  agreement or a breach thereof. Pending resolution of a
                  dispute, each party shall continue to fulfill its obligations
                  under this agreement.

8.2.2             ARBITRATION : In the event of any question, dispute or
                  difference arising under the agreement, or in connection
                  thereto, except as to the matter of billing which is
                  specifically provided for and governed by the terms and
                  conditions in Para 7.6 (7.6.1 to 7.6.5), the same shall be
                  referred for settlement by arbitration of three Arbitrators,
                  one each to be nominated by each party and the third
                  Arbitrator to be appointed by the said two nominated
                  Arbitrators. The arbitration proceedings shall be governed by
                  the Indian Arbitration and Conciliation Act, 1996 or any
                  statute, amendment or re-enactment thereof and incorporation
                  for the time being in force save and except that the award
                  shall be given at the earliest. The place of arbitration shall
                  only be New Delhi and it is Hon'ble Delhi High Court alone who
                  shall have the jurisdiction.

8.2.3             Nothing contained in this agreement may be construed to
                  preclude the right of a party to have recourse to TDSAT on
                  matters over which TDSAT has jurisdiction under Telecom
                  Regulatory Authority Act, 1997 as amended from time to time or
                  any other law for the time being in force.

<PAGE>

                                   ARTICLE - 9

9.1      LIABILITY, INDEMNITY AND INTELLECTUAL PROPERTY RIGHTS

9.2.1             Each party shall guarantee that the equipment/systems and
                  other articles of the service commissioned/provided by it,
                  does not infringe any copy-right or trademark or rights
                  against passing off intellectual property of any third party.

9.2.2             Either party must not use a trademark belonging to another
                  party as a trade mark without the prior written consent of
                  that other party.

9.2.3             Either party must not use any intellectual Property rights,
                  which it holds as the sole owner body or ILDO from, or joint
                  owner with another body or person to prevent or hinder the
                  provision of Services in any manner whatsoever. Where a party
                  jointly owns Intellectual Property with a third person, or has
                  been licensed to use the intellectual Property by third person
                  then such party must obtain or use its reasonable efforts to
                  obtain proper permission as required from such third person
                  either as joint owner or licensor, to enable to provide
                  Services without restriction or hindrance.

9.2.4             Each party shall indemnify the other innocent party against
                  all liability or loss arising from, and reimburse all
                  reasonable costs, charges and expenses incurred in connection
                  with, any action, claim, suit or demand; alleging infringement
                  against the Innocent Party of the rights of a third person
                  arising from the use by the Innocent Party of Intellectual
                  Property disclosed or licensed by the indemnifying party under
                  this agreement.

9.2.5             The conveyance of information between MTNL and the ILDO which
                  shall take place, shall not constitute or imply the granting
                  of any rights under any copy right, patent, trademark or any
                  other Intellectual property rights either at the time of
                  conveyance or subsequently.

<PAGE>

                                  ANNEXURE - 1

                         MTNL/ILDO'S NETWORK INFORMATION

3.                ILDO INFORMATION

3.1               Name(s) and Postal address of ILDO'S gateway exchanges in
                  Service area of Delhi/Mumbai.

3.2               Postal address of each building within Delhi/ Mumbai, which
                  the ILDO believes to be suitable for supporting
                  interconnection to MTNL's network.

4.                MTNL INFORMATION (to be provided by MTNL)

4.1               Names and Postal address of TAX Tandem/ Local exchanges and
                  main Local Exchanges within the MTNL'S Licensed Area.

<PAGE>

                                  ANNEXURE - 2

                        DEMAND FOR INTERCONNECT CAPACITY
                       (TO BE FURNISHED BY THE ILDO/MTNL)

A.                Name of ILDO

B.                Name of ILDO's Exchange

C.                MTNL's Local/Tandem Exchange
                  (Suggested by ILDO for interconnection)

D.                Date when required.

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------
                                                                             Type of
Type of                     Busy hour Call      Traffic in       No. of      Signaling
Traffic                      attempts [B]       Erlangs [E]      Ports       (Note - 1)
--------------------------------------------------------------------------------------
<S>                         <C>                 <C>              <C>         <C>
ILDO
Exchanges to
MTNL Local/
Tandem
--------------------------------------------------------------------------------------
MTNL  TAX to ILDO
gateway switch
--------------------------------------------------------------------------------------
</TABLE>

Signature of ILDO/MTNL:
Date:

Acknowledgement by MTNL/ILDO:
Date:

Note 1: CCS7 signaling is supported by MTNL's new technology switches
       e.g. AXE-10, EWSD, OCB-283, Fetex 150 & 5ESS switches.

Note 2: Clause 2.2.2 stipulates direct connectivity between ILDO'S
       exchange and MTNL's terminating local exchange wherever the
       originating and terminating traffic to and from exchange of
       MTNL justifies more than 8 PCMs. In such cases the traffic
       figure for each MTNL exchange shall be furnished.

<PAGE>

                                  ANNEXURE - 3

                              CANCELLATION CHARGES

         If the ILDO cancels a firm demand for capacity more than thirty days
after placing the same, a cancellation charge as set out below shall be payable
by him to the MTNL.

<TABLE>
-----------------------------------------------------------
<S>                                     <C>
CANCELATION                             CANCELLATION
AFTER RECEIPT                           CHARGE
OF FIRM  DEMAND                         AS A PERCENTAGE OF
(NUMBER OF DAYS)                        1 YEAR'S
                                        CONNECTION CHARGE *
-----------------------------------------------------------
0-90 days                               50%
more than 90 days                       100%
-----------------------------------------------------------
</TABLE>

<PAGE>

                                  ANNEXURE - 4

                           CONTENT OF THE CHARGE BAND

<TABLE>
<CAPTION>
                                             LENGTH
PARAMETER                  TYPE             (OCTETS)          CODE
--------------------------------------------------------------------
<S>                        <C>              <C>               <C>
Message Type                 F                 1              H `31'

Charge Band Number           O                 3              H `FF'

End of Optional              O                 1              H `0'
Parameters
--------------------------------------------------------------------
</TABLE>

CHARGE BAND METHOD:

a)       Natural Operation

                  Means that the charging is elaborated locally by a local
                  exchange from the implicit charging data included in the
                  charge band parameter and sent by a DTAX exchange.

                  The originating local exchange knows from the analysis of the
                  call type that the call has to be charged on a change band
                  basis.

                  Transmission of the implicit charging data is achieved by
                  using the CRG message with only one charge band number
                  parameter included.

                  The CRG message with charge band number is transmitted by a
                  DTAX exchange before ACM message, when sufficient address
                  information is received to determine the charging information.

                  The CRG message with charge band number is retransmitted
                  unchanged by an intermediate exchange.

b)       Malfunction cases:

                  If the message received by the local exchange does not include
                  the charge band parameter or includes the charging unit number
                  parameter in addition to the charge band parameter, the
                  message is considered as incorrect. That is to say, if the
                  incorrect CRG is the first backward message received, the
                  circuit is reset (forward RSC sending) and an automatic call
                  reattempt is made; otherwise, the incorrect message is
                  ignored.

                  In all cases, the CRG should be received by a local exchange
                  before answering condition (i.e. ANM/CON reception); otherwise
                  the call is released by REL forward sending (clause 111).

                  If several correct charge band CRG are received before answer,
                  only the last one is considered.

                  The call is stated as 'not charged' by a local exchange if the
                  charging indicator received in the Backward Call Indicator
                  (BCI) in ACM/ANM or CON has the value `No charge' and this
                  whatever the value of the received charge band number may be.
                  Clause 2.5.2 may be referred in this regard.

<PAGE>

                                  ANNEXURE - 5

                   PROFORMA OF BANK GUARANTEE UNDER ARTICLE 7

To

M/S MAHANAGER TELEPHONE NIGAM LIMITED
____________
____________

1.       In consideration of Mahanager Telephone Nigam Limited, a company
registered under the Companies Act and having registered office at Jeevan Bharti
Building, Tower No.1, 12th Floor, 124 Connaught Circus, New Delhi- 110001
(hereinafter called the `MTNL') agreed to interconnect its network with that of
M/s _______________, licensed to provide International Long Distance Services
(hereinafter referred to as ILDO) a company registered under the Companies Act
and having registered office at .............., for the purpose of establishing
a International Long Distance Services network of the ILDO in accordance with a
interconnect agreement/ (hereinafter referred to as `the agreement') No :
________________________ dated __________, entered into between MTNL and ILDO,
which inter-alia provides for production of bank guarantee to the extent of Rs
______ Crore (Rupees _____ Crore only) under the said agreement by way of
security for payment of various amounts receivable by MTNL from ILDO. We
..........(indicate the full name, address, and other particulars of the bank)
(hereinafter referred to as the BANK) at the request of the ILDO hereby
irrevocably and unconditionally guarantee to the MTNL that the BANK shall pay
without demur all the amount of the dues under the interconnect agreement
whenever called upon to pay by the MTNL.

2.       We, the BANK, hereby undertake to pay to the MTNL an amount not
exceeding Rs _____ Crore (Rupees _____ Crore only) against any non payment of
any amount by ILDO to MTNL or by reason of any failure of the ILDO to extend the
validity of the guarantee in accordance with the terms stipulated in the
agreement.

3.       We, the BANK, hereby further undertake to pay as primary obligor and
not merely a surety to pay such sums not exceeding Rs ____ Crore (Rupees ______
Crore only) to the MTNL immediately without demur and objections and without
reference to ILDO and without questioning the right of MTNL to make such demand
or the propriety or legality of the demand, merely on demand of the MTNL stating
that the amount claimed is due by way of failure of the ILDO to pay the due
amount or any part thereof in terms of the said agreement.

4.       We, the BANK, do hereby declare and agree that the decision of the MTNL
as to whether the ILDO has failed to pay the due payment or any part thereof
shall be final and binding on us.

5.       We, the BANK, do hereby declare and agree that the

Guarantee herein contained shall remain in full force and effect initially for a
period of one year from the date hereof and further agrees to extend the same
from time to time (one year at a time) so that it continues to be enforceable
till all the dues of the MTNL by virtue of the said agreement have been fully
paid and its claim satisfied or discharged or till MTNL satisfies that the terms
and conditions of the said agreement have been fully complied with and
accordingly discharges this guarantee.

The MTNL shall have the fullest liberty without our consent and without
affecting in any manner our obligations hereunder to vary any of the terms and
conditions of the said agreement or to extend or to allow time for payment
related performance of any obligation of the said ILDO from time to time or to
postpone for any time or from time to time any of the powers exercisable by the
MTNL against the said ILDO and to forebear or to enforce any of the terms and
conditions relating to the said agreement and we shall not be relieved from our
liability by reason of any variation or extension being granted to the said ILDO
or forbearance act or omission on part of the MTNL or any indulgence by the MTNL
to the ILDO or to give such matter of thing whatsoever which under the law
relating to sureties would but for this provision, have effect of so relieving
us.

Any claim, which the BANK has against the ILDO, shall be subject and subordinate
to the prior payment and performance in full satisfaction of all the obligations
towards MTNL under this agreement. The BANK will not exercise any legal right or
remedy of any kind in respect of any payment or performance against ILDO so long
as the obligation of the BANK under this guarantee remains owing and
outstanding.

<PAGE>

This guarantee shall be irrevocable and the obligations of the BANK herein shall
not be conditional to any prior notice by the MTNL or by the ILDO.

6.       We, the BANK, undertake not to revoke this guarantee during its
currency and any extension thereof except with the prior consent of the MTNL in
writing and agree that any change in the constitution of MTNL or the ILDO or us
shall not discharge our liability hereunder.

Dated -......day of......(month) of......(year) at......

Signature
Bank Seal
Name and address of the Bank
Telephone and Fax No.

Witnesses:
(Signature, Name & Address)

1.

2.

<PAGE>

                                                                      SCHEDULE-I

                       ACCESS CHARGES AND REVENUE SHARING
           PAYMENT FOR CARRIAGE AND TERMINATION OF OUTGOING ISD CALLS

(i)      MTNL shall pay to ILDO for carriage and termination of ISD calls
         originated in India and terminated outside India using ILDO's ILD
         network at following rates as per present tariff enclosed in
         Annexure-I:

<TABLE>
<CAPTION>
ISD calls terminated in            Per minute rate
------------------------           ---------------
<S>                                <C>
USA/CANADA/EUROPE/UK               [Text Redacted]
AFRICA/MIDDLE EAST                 [Text Redacted]
REST OF WORLD                      [Text Redacted]
</TABLE>

(ii)     At a later date, if tariffs are revised downward by ILDO unilaterally,
         MTNL shall retain minimum per minute charge as below:

<TABLE>
<CAPTION>
ISD calls terminated in            Minimum Per minute retention of MTNL
------------------------           ------------------------------------
<S>                                <C>
USA/CANADA/EUROPE/UK                        [Text Redacted]
AFRICA/MIDDLE EAST                          [Text Redacted]
REST OF WORLD                               [Text Redacted]
</TABLE>

         The above retention has been worked out on an average tariff of [Text
         Redacted] per minute assuming [Text Redacted] paid minutes in peak
         hours and [Text Redacted] in off peak hours.

(iii)    In case ILDO offers lower rates for carriage and termination of ISD
         calls originated in India and terminated outside India to any other BSO
         / CMSP, NLDO or ILDO, the same shall apply to MTNL retrospectively from
         the date of applicability of such lower rates to any other service
         provider mentioned above.

(iv)     ILDO shall pick up the traffic from the Points of Interconnection at
         gateway TAXs designated by MTNL.

(v)      The above are fixed rates per minute without any off peak and shall
         apply all the 24 hours of the day for all days of the year.

(vi)     There shall not be any minimum guaranteed outbound traffic from MTNL to
         ILDO.

(vii)    The applicable unit (pulse rate) for measurement of said minutes shall
         be 1 second, rounded off to next higher minute on total calls in a
         month.

(viii)   ILDO shall accept and carry calls to any destination in the world as
         offered to it by MTNL.

(ix)     MTNL shall bill and collect the charges for ISD calls originated in
         MTNL's network and carried by ILDO's network for termination in any
         country outside India.

II.      PAYMENT FOR CARRIAGE AND TERMINATION OF INCOMING ISD CALLS

(i)      For incoming international calls, ILDO shall pay to MTNL a per minute
         charge for carriage and termination as per the details given below :-

<TABLE>
<S>                                                      <C>
------------------------------------------------------------------------
FOR TERMINATION INTO FIXED TELEPHONES                    [Text Redacted]
------------------------------------------------------------------------
FOR TERMINATION INTO WLL (M) AND GSM
TELEPHONES                                               [Text Redacted]
------------------------------------------------------------------------
</TABLE>

<PAGE>

Note 1:

         a.       There shall not be any peak or off peak rates. The above rates
                  shall apply for all 24 hours of the day for all days of the
                  year.

         b.       The charges are independent of originating point for calls.

         c.       The applicable unit (pulse rate) for measurement of said
                  minutes shall be 1 second rounded off to next higher minute on
                  total calls in a month.

(ii)     ILDO shall deliver all the incoming international calls meant for MTNL
at POI at all the tandems of MTNL and further carriage from the POI to the final
destination shall be done by MTNL.

(iii)    If ILDO contracts a higher charge to another BSO/CMSP or NLDO the same
shall apply to MTNL as well. These revised rates for termination shall apply
from the dates they are applied for another carrier, under the identical terms
and conditions. Similarly, if MTNL contracts lower charge to another ILDO under
certain terms and conditions, the same shall apply to ILDO as well. These
revised rates for termination shall apply from the dates they are applied for
another carrier, under the identical terms and conditions. The rate for NLDO
will be matched at the SDCA level if it is determined that MTNL has obtained the
NLD license.

(iv)     In case of use of MTNL's network for carriage and termination of calls
in the network of some other BSO/CMSP, consolidated charges as above shall be
payable, by ILDO along with a transit charge of [Text Redacted] per minute and
any charge to be paid to the other BSO/CMSPs shall be settled by MTNL. However,
volume discount, if any, shall not be applicable on such calls. Such calls shall
be handed over to MTNL by ILDO on separate trunk group at TAX/Tandem designated
by MTNL.

<PAGE>

III.     VOLUME RELATED REDUCTION

         INCOMING TRAFFIC: The volume related reduction shall be applied on
         billed amount for the incoming traffic in any month when traffic
         exceeds [Text Redacted] million paid minute after excluding the transit
         traffic meant for other networks. For all incoming traffic into MTNL
         network, following volume related reduction in the termination charges
         will be applied:

<TABLE>
<S>                                                <C>
(a) Upto [Text Redacted] million minutes / month   [Text Redacted]

(b) [Text Redacted] million minutes / month        [Text Redacted] (on the total
                                                   volume)

(d) [Text Redacted] million minutes and above      [Text Redacted] (on the total
                                                   volume)
</TABLE>

IV.      GENERAL

         All charges relating to the existing bandwidth and port connectivity
         which were hitherto provided free to ILDO will have to be paid as per
         applicable tariff. The Parties agree that charges for the use of any
         other chargeable resources of each other which are not specifically
         agreed otherwise, will be mutually agreed upon.<PAGE>

                                                                     EXHIBIT 4.3

                   Memorandum of Agreement on Settlement Rate
                                       Of
                International Telecommunications Services between
                          Videsh Sanchar Nigam Limited
                                       And
                                      AT&T

This termination Rate Agreement made by and between Videsh Sanchar Nigam Limited
(VSNL) and AT&T sets forth the understandings of AT&T and VSNL with respect to
termination rates and other terms and conditions to apply to the exchange of
Switched voice services between AT&T in United States) which includes the
Continental US, District of Columbia, Alaska, Hawaii, Puerto Rico & the US
Virgin Islands) and VSNL in India.

1.  This agreement shall be in effect from May 1, 2003 through May 31, 2003.

2.  Switched Voice Services referred to in this agreement shall include IDD,
    ISDN, GSDN-IVPN, person to person, station to station, Home Country Direct
    - including third country calling, International 800 ("1800") exchanged
    between AT&T in United states and VSNL in India.

3.  The following terms and rates shall apply to traffic exchanged between the
    parties

4.  AT&T shall pay VSNL a per minute termination rate as follows:

A.       IDDD, ISDN, Person-to-Person, Station-to-Station

<TABLE>
<CAPTION>
 Destination                       Code            Termination Rate / Per Minute
 -----------                       ----            -----------------------------
<S>                               <C>              <C>
New Delhi                          9111                   [Text Redacted]
Mumbai (Bombay)                    9122                   [Text Redacted]
Kolkatta (Calcutta)                9133                   [Text Redacted]
Chennai (Madras)                   9144                   [Text Redacted]
Ahmedabad                          9179                   [Text Redacted]
Jallandhar                        91181                   [Text Redacted]
Ernakulum                         91484                   [Text Redacted]
Hyderabad                          9140                   [Text Redacted]
Bangalore                          9180                   [Text Redacted]
Mobile                             9198                   [Text Redacted]
Mobile                             9194                   [Text Redacted]
</TABLE>

B.       [Text Redacted]                                  [Text Redacted]

C.       [Text Redacted]                                  [Text Redacted]

         [Text Redacted]

4.       Country Direct/1800                              [Text Redacted]
         Collect calls made from India would be treated as calls destined to
         India and the settlement rates of [Text Redacted] would be applied.

5.       VSNL shall pay AT&T a per minute termination rate of [Text Redacted]
         for all minutes.

6.       There will be no commitment from VSNL for traffic terminating in AT&T

7.       Best efforts will be made for traffic realization of 99%.

8.       There would be a mixed blend of traffic to destinations indicated above
         and Rest of India traffic as in the Past based upon commercial issues.

<PAGE>

9.       During the Agreement period, both parties will use commercially
         reasonable efforts to maintain and grow the traffic exchanged with each
         other on their mutual networks.

10.      The Parties agree to make best efforts to renegotiate the settlement
         rates prior to the end of the Term of this Agreement.

11.      The settlement rate will be applied to each conversation minute of use.
         Minutes of traffic upon which settlements are paid, will be measured
         using accumulated seconds.

12.      Best efforts will be made for the payment of the net balance due to
         either party to be affected within 30 days after net balance for the
         traffic period is agreed.

13.      VSNL is responsible for supplying AT&T with a complete and accurate
         dialing plans. If there are changes to the dialing plan (i.e. addition
         or deletion of numbers) these changes must be supplied to AT&T at least
         30 days (30) before the dialing plan takes effect so that AT&T has time
         to incorporate the changes into its systems. The dial codes related to
         section 3B and 3C already supplied to AT&T.

14.      The concurrence below evidences the intent to present this agreement
         for approval by AT&T's duly authorized representative.

15.      This agreement shall be binding only upon execution by the duly
         authorized representative of AT&T and VSNL

Concurred on behalf of AT&T Corp.     Approved on behalf of Videsh Sanchar Nigam
                                      Limited

Sd/-                                          Sd/-
_________________________________     __________________________________________
Name:                                 Name:   K.P. Tiwari
Route Manager                                 ED (Ops)
_________________________________     __________________________________________
Title:                                Title:
May 2003                                      30.05.2003
_________________________________     __________________________________________
Date                                  Date

Approved on behalf of AT&T Corp

Sd/-
_________________________________
Name:
VP - Int'l Settlements & Cost management
_________________________________
Title:
June 10, 2003
_________________________________
Date

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00056-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00056-of-00352.parquet"}]]