The Hindu Business Line : BSNL goes festive with 60-70% cut in ISD rates

IN what could be a Diwali bonanza for its 40 million plus landline, as also its cellular and limited mobility (WLL) subscribers, Bharat Sanchar Nigam Ltd (BSNL) has slashed its ISD call rates to the US, the UK, Canada and other European countries by between 60 per cent and 70 per cent for a month starting Wednesday.

As against the present peak-time call rate to these countries of Rs 24 per minute and off-peak rates of Rs 21.18 per minute, BSNL customers can make calls to the UK for Rs 7.20 per minute and to the rest of the western countries for Rs 9.60 per minute. There will be no categorisation of peak and off-peak time during this period.

Calls to the rest of the countries will, however, continue to remain higher. A one-minute call to SAARC & other neighbouring countries will continue to cost Rs 21.18 per minute during peak time and Rs 18 per minute during off-peak time, while those to the rest of other countries (excluding the UK, the US and Europe) will be charged Rs 24 per minute peak and Rs 21.18 off-peak rates.

According to sources, this is a marked departure from the earlier stand taken by BSNL that it would not tamper with the ISD call rates in response to the lower tariffs being offered by the cellular operators.

While all the private cellular operators have slashed their ISD tariffs to Rs 15.99 per minute, BSNL had decided to continue with the previous rates for both its landline and cellular services, which were between 24 per cent and 33 per cent more expensive.

The decision was taken in view of the sharp hit in its revenue margins, which is already taking a big hit because of the increasing competition. Although the international voice traffic is a small portion of the overall volumes, it continues to be a substantial revenue earner.

Another reason why BSNL stuck on to the higher rates was because of the review in the interconnection usage charge (IUC) regime that is due to be announced by the Telecom Regulatory Authority of India. If there is a change in the long distance component of the IUC then it could consider reducing the ISD rates correspondingly.

At present, of the Rs 24 per minute peak time ISD rate that BSNL charges the customer, it retains close to Rs 15 and gives Rs 9 to VSNL — the preferred carrier of ISD calls — as interconnection charges. Of this amount, VSNL can retain only around Rs 2 and has to hand over the remaining portion to the foreign carriers for routing the call to the destination.

BSNL can therefore, if it wants, choose to retain a lesser portion, and pass on the benefit to the customers. This is precisely what it is doing as a festive offer to its customers, the sources said.

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