The Hindu Business Line : Calling abroad? Net telephony the best bet

DESPITE the sharp fall in ISD tariffs, Internet telephony seems to be an increasingly preferred option for people who want to make international long distance calls at cheaper rates notwithstanding the poor quality of voice.

With as many as 43 Internet service providers (ISPs) offering telephony over the Web, close to 20.1 million minutes have been clocked during the quarter ending December 2003, an impressive 41.55 per cent growth over the 14.2 million minutes in the preceding quarter, as per the latest statistics collated by the Telecom Regulatory Authority of India (TRAI). According to official sources, this growth in Internet telephony clearly shows that the market remains very price sensitive, and the tariff difference between international calls over the Internet and those from a landline or mobile phone is still high. A clear indication that ISD tariffs have not bottomed out and there is room for more price drops.

For that matter, while a one minute call to the US, most of Europe and South East Asia costs an average of Rs 4 over the Web, Bharat Sanchar Nigam Ltd (BSNL), the largest landline service provider, charges Rs 7.20 to the UK, Rs 9.60 to the US and Europe, and Rs 12 to the South East Asian countries. Similarly the largest GSM cellular operator, Bharti, and biggest CDMA mobile service provider, Reliance Infocomm, charge Rs 15.99 per minute for calls to these regions. The sources noted that with BSNL now slated to launch its own international long distance (ILD) services starting April 2004, there could be more competition in this segment. The existing operators that include Videsh Sanchar Nigam Ltd (VSNL), Bharti, Reliance and Data Access will be forced to take a relook at their tariffs if BSNL decides to drop rates.

A similar situation exists in the STD segment too, if the TRAI decides to allow ISPs to offer Internet telephony for inter-circle calls, a matter that is at present under consideration. ISPs can currently offer Internet telephony services for transmitting voice only from PC to PC both within the country and outside. PC-to-telephone voice transmission is allowed only for calls outside the country. Although the current STD rates are much lower than the ISD rates, there is enough scope for the ISPs to exploit. An inter-circle call on the Internet would be the same cost as that of a local call which makes it much cheaper than the rates being offered at present by the telecom operators.

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