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Tuesday, Jun 29, 2004

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As laws lag tech, grey market in ILD flourishes

Kripa Raman

Mumbai , June 28

YOU do not need rocket science to prove that illegal international long distance telephony (ILD) is happening, and increasing, according to Mr S.K. Gupta, Managing Director, Videsh Sanchar Nigam Ltd.

One feature in proof of this, he says, is the growing number of international calls received in India, where the originating number shows as an Indian number on mobile handsets or on telephone instruments, which have the caller identification facility.

"The calls from abroad are illegally landed in India from where they are routed to their destination within India," he said. Since the originating number shows an Indian number, the BSNL (or other operator's) switches are not able to identify them as an international call and pass them on as a domestic call.

The other indication is the number of Internet sites, which offer for example, sub-10-US-cents per minute rates from the US to India. Other ILD operators agree that the grey market is on the increase. "Small operators take a dozen or so connections from MTNL or BSNL and transfer VoiP calls to these numbers. Calls from these numbers can then pass off as domestic calls," says an official from a large Indian telecom conglomerate, which also has ILD operations.

In fact, many telecom industry employees themselves admit that they have received international calls from what appear to be Indian national numbers. "I have a friend who calls in regularly from Chicago, but the originating number is always Indian on my mobile. I checked it, and it turned out to have a Muzaffarnagar code," says one of them.

This rise in the grey market is due to the awareness of technology among STD or PCO operators even in small towns and villages, say telecom officials.

"The problem is very severe," agrees Mr Vinay Kalantri, whose Anyuser Telecom runs VoIP telephony operations.

"Small operators have learnt that by buying certain equipment such as some Cisco devices, they can put calls on to broadband. They also buy minutes from VoIP operators and connect to the VoIP backbone."

It is illegal for VoIP services to be connected to PSTN lines, but VoIP operators have no control over what is done with the minutes they sell. STD booths thus sell minutes at lower-than-official ILD rates but higher than the VoiP rates.

VSNL, with the help of BSNL and MTNL, has often sought the help of the Central Bureau of Investigation to bust grey market operations. But as quickly as they are uprooted, they sprout in some other location.

"The regulations have not kept abreast of the technology trends," said one analyst with a prominent brokerage. He says the complaints are also part of the "very-valid pressure tactics" on the part of ILD operators to persuade the Telecom Regulatory Authority of India to reduce termination and access deficit charges so that the grey market's advantage is wiped out.

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As laws lag tech, grey market in ILD flourishes

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