Isd Call Rates To Fall As Resellers Enter Picture

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ISD call rates to fall as resellers enter picture

3 Jun, 2008, 0111 hrs IST, TNN

MUMBAI: Long-distance calls are set to get cheaper. Telecom Commission (TC), the Department of Telecom’s policy-making arm, has agreed to allow resale of international bandwidth in a move that will cheer BPOs, IT firms, banks and small enterprises by bringing down prices of international bandwidth.

Last year, DoT had accepted telecom regulator TRAI’s recommendations in this regard and the TC’s nod was awaited. At a meeting held in New Delhi on May 23, "it was decided that a new category of reseller license for international private leased circuits (IPLC) will help the growth of the telecom sector," sources told ET.

The TC has agreed to TRAI recommendation that the licence fee for reseller should be 6% of AGR (annual gross revenues). "The commission has also decided to review the progress of these licenses after six months," said sources.

Resellers will have to comply with the security conditions that are being followed by ISD operators, said sources. "A few clauses specifically applicable to IPLC resellers will also be introduced," said sources.

ISD operators have to maintain arrangements for enabling security monitoring as and when required by the designated security agencies. The cost of monitoring equipment is borne by operators.

Also, operators have to take security clearance from the government before deploying any foreign personnel for installation, operation and maintenance of the network.

IPLC, a point-to-point private line, can be used by companies or individuals for internet access, business data exchange, video conferencing, and any other form of telecommunication across the world.

International bandwidth is the medium of carriage of voice and data services and is provided by international long-distance operators (ILDOs) through undersea cables. Resellers, who do not have infrastructure, buy bandwidth in bulk from ISD operators and resell to users at a cheaper rate due to economies of scale.

As a result of introduction of reseller license, ILD operators like Tata Communications (formerly VSNL), Bharti Airtel and Reliance Communications will face competition. This will bring down bandwidth prices.

"The recommendations relating to IPLCs will benefit BPOs, software companies and ITeS providers who avail such services. They are likely to see more service providers coming into the market, which will bring down prices to a certain extent," Net4 CEO & MD Jasjeet Sawhney told ET. BSE-listed Net4 is an IP communication service provider.

According to TRAI, as against the low number of international bandwidth providers in India, there are 14 operators in Korea, 24 in France and 32 in Germany. “It is essential to make this key input available to various economic and social activities at a competitive price because the market forces are not effective,” TRAI has said.