Financial Daily from THE HINDU group of publications
Friday, Oct 25, 2002
Info-Tech - Telecommunications
Marketing - Market Shares
Data Access gives VSNL a run for its money
NEW DELHI, Oct. 24
INTERNATIONAL long distance operator Data Access India Ltd is turning out to be the proverbial dark horse, grabbing a major chunk of the market from incumbent operator Videsh Sanchar Nigam Ltd (VSNL).
The company, a joint venture between Pacific Century Cyber Works, Hong Kong (PCCW) and SPA Enterprises Ltd, has already captured a 30 per cent market share, clocking close to four million incoming call minutes per day.
This would translate into 1.2 billion call minutes in the first year of operation, as against the estimated overall international call traffic (incoming and outgoing) of 4 billion call minutes. According to Mr Siddhartha Ray, Managing Director, Data Access, despite a negligible outgoing call traffic Data Access hopes to breach the 50 per cent market share in November, enough to give VSNL a run for its money.
``Our present traffic volumes are just the beginning. There is going to be an exponential growth in our incoming traffic and we expect to touch 6 million call minutes per day by end-November. This, even if BSNL continues to divert all its outgoing calls through VSNL,'' he told Business Line.
The company, he said is not as bothered about the outgoing calls, because the incoming calls into the country are close to four times that of the outgoing calls. In any case, if BSNL wishes to route its outgoing traffic through Data Access network its even better, he said. Mr Ray noted that this performance has been possible because of the "realistic" agreements signed with its partners.
As per the memorandum of understanding reached by the company with BSNL it pays the incumbent operator Rs 4.40 per minute for carriage and termination of its incoming calls, for a distance of 50 km. BSNL is also paid Rs 6.40 per minute for a distance between 50 km and 200 km, Rs 8.80 per minute for a distance between 200 km and 500 km, and a rate of Rs 13 per minute for a distance greater than 500 km.
With the volumes of Data Access growing by the day, it is also eligible for volume discounts from BSNL.
As per the agreement, the company is entitled to the discounts in case it crosses the monthly volume of traffic fixed at 30 million minutes per month (incoming) and 7.5 million minutes (outgoing). In the case of incoming calls, since it is already bringing in 120 million minutes, the company is at major advantage and has been raking in the money.
Meanwhile the other ILD operator Bharti, which too claims to be making inroads is quite guarded about its volume of traffic. When contacted, Mr N. Arjun, CEO, Bharti Telesonics Ltd, noted that the company would prefer not to "divulge market sensitive" information.
All in all, the private operators are certainly nibbling away at VSNLs market share.
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