Financial Daily from THE HINDU group of publications
Monday, Feb 18, 2002
Info-Tech - Telecommunications
Bharti to peg ILD rates 50% cheaper than VSNL
Mr Sunil Mittal
NEW DELHI, Feb. 17
STARTING April, the Bharti group has decided to offer international long distance (ILD) services at rates that are up to 50 per cent lower than those charged by incumbent operator Videsh Sanchar Nigam Ltd (VSNL).
According to Mr Sunil Mittal, Chairman and Group Managing Director, Bharti Enterprises, this drastic cut in tariffs would force VSNL and other potential players to review their rates, bringing about a windfall for the customers. Very much like what happened in the STD sector.
In an exclusive interview to Business Line, Mr Sunil Mittal noted that Bharti's ISD services are scheduled to be launched in April, an application for which is pending with the Department of Telecommunications (DoT).
"We are sure to get the licence in the next couple of weeks, and are all geared up to launch ILD services after VSNL's monopoly ends in March. Like in the case of our national long distance (NLD) services, we will once again lead the way in providing affordable services to the customers,'' he said.
He said that the monopoly enjoyed by VSNL in international services allowed it to charge "significantly above costs". However, the entry of Bharti and other players after March would ensure cost-based charges, he said.
"Already, VSNL has decreased its bandwidth rates ahead of Bharti's launch. We will be slashing these rates further by around 50 per cent, along with a similar cut in the tariffs for voice traffic,'' he said.
Mr Mittal noted that the company is negotiating settlement rates with foreign carriers in the American continent, Europe and West Asia. The rates should be finalised by the time the company gets its licence for offering international services, he said.
The current ISD tariff for the SAARC and neighbouring countries ranges from Rs 21 to Rs 25 per minute, while for countries in Europe, Asia, Gulf and the Oceania region, it ranges from Rs 34 to Rs 40 per minute.
ISD tariff on calls to the American continent and other countries in the Western hemisphere ranges between Rs 42 and Rs 48 per minute.
As regards the Tatas' acquisition of VSNL and the impact it would have on Bharti's operations, Mr Mittal noted that competition was one thing that the company has always welcomed. This will help the service providers to keep a strict tab on the quality of service as also the tariff rates.
"While the Tatas certainly have a headstart in terms of customer base having bagged (VSNL), we expect to make inroads into their monopoly within the first few months of operations. Our target, to begin with, has been pegged at 10-15 per cent of the total ILD market,'' he said.
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