Price war erupts in ILD Tariffs

[niket 0]

Price war erupts in phone services mkt

Source: Sify, March 10, 2004

A price war has erupted in the country's international phone services market after Data Access offered to connect calls from state-run Bharat Sanchar's network to key Western nations at a big discount to the existing price.

Telecom operator Data Access said it had offered Bharat Sanchar Nigam Ltd a "settlement rate" of Rs 1.69 (US 3.75 cents) a minute for connecting calls to the United States, Canada and the United Kingdom, far less than the nine rupees Bharat Sanchar currently pays for US connections.

Unlisted Bharat Sanchar is by far the country's largest domestic phone services company, with slightly more than 35 million fixed-line and nearly five million mobile phone customers.Bharat Sanchar had called for bids from operators to carry its calls out of the country after Videsh Sanchar Nigam Ltd lost its monopoly on providing this service to the state-run giant in mid-February.

As part of Videsh Sanchar's privatisation in February 2002, Bharat Sanchar was obliged to route outgoing calls with Videsh for two years, provided the rates were competitive.Bharat Sanchar has yet to decide on the winning bids and when they would go into effect, a senior official said, adding that it was now waiting for Videsh Sanchar's counter-offer.Indian companies together earn revenue of about one billion dollars a year from incoming and outgoing international calls, although incoming calls outweigh outgoing calls by about four times in terms of minutes.

Four Indian operators with licences for international phone services -- Videsh Sanchar, Data Access, Bharti Tele-Ventures and Reliance Infocomm -- have bid for various routes in Bharat Sanchar's tender.

New Delhi-based Data Access, a joint venture between Hong Kong fixed-line company PCCW Ltd and India's SPA Enterprises Ltd, is planning an initial public offering soon. Reliance Infocomm is 45-percent owned by Reliance Industries, the flagship of India's largest business group. Videsh Sanchar, part of the second-largest, Tata group, earns about three quarters of its revenue from international services.

Edited March 11, 2004 by Ashokjp

[Chirag 5]

VSNL to carry all of BSNL's foreign calls

Thomas K Thomas in New Delhi | March 31, 2004 07:39 IST

Rediff.com

Bharat Sanchar Nigam Ltd will route all international calls from its 42 million subscribers via the Tata-managed Videsh Sanchar Nigam Ltd. The deal was struck after VSNL matched the Rs 1.69 per minute settlement rate to the United States and United Kingdom offered by Data Access.

In the first round of bidding for BSNL's traffic to nine foreign sectors, VSNL had lost out on the crucial US, UK and Middle East sectors.

Data Access had emerged the lowest bidder in these sectors, which account for 63 per cent of BSNL's international long-distance traffic.

VSNL has charged Rs 6 a minute as the settlement rate since April 2002.

Initially, in the first round, VSNL slashed the rate to Rs 2.20 per minute. Now, with the settlement rate coming down to Rs 1.69, consumers can expect a 15-20 per cent drop in international long-distance tariffs. Analysts predict that the cut in the settlement rates from Rs 6 to Rs 1.69 could lead to a Rs 200 crore (Rs 2 billion) fall in revenue for VSNL.

BSNL sources said the agreement with VSNL made sense since the two companies had a long-standing relationship.

"Given the fact that VSNL is matching the offer made by Data Access, there is no need for us to route our international long-distance traffic through other companies. This also saves us the trouble of establishing new interconnect agreements and points of interconnection with other players," a BSNL executive said.

While this is good news for the revenue-sapped VSNL, for rival firm Data Access it rings in bad news. Recently, Data Access's initial public offer was put on hold after the Securities and Exchange Board of India raised queries about it.

Of the 110 million minutes of outbound traffic every month from India, BSNL accounts for 80 million minutes. Mahanagar Telephone Nigam Ltd, cellular operators and the other basic players account for 10 million minutes each.

Executives in Data Access, however, said the BSNL decision would not have any implication on its bottom line since its current business model was based on international long-distance traffic from private players which account for about 10 million minutes a month. They said the company had garnered 30 per cent of the inbound international long-distance traffic and the revenue projections had been made on the basis of this model.

BSNL postpones ILD launch

BSNL has pushed back the launch of its international long-distance services by a few weeks because the necessary agreements with international carriers are still not in place.

"Discussions are on with international carriers and we will launch our international long-distance services as soon as we finalise an agreement with at least one carrier," a BSNL executive said. The company was scheduled to launch its services on Wednesday.

[anujit 0]

A very good reason why we need competition and not protectionism in this country!

When the bids were opened VSNL said they would never get their rates down! Wonder what happened to that. How are they able to give us access @ Rs. 1.69.

Even more interesting is this - if connectivity charges are Rs. 1.69, and assuming BSNL overheads 100%, BSNL profits 100% the call should not cost more than Rs. 5!!!

Why are we paying Rs. 24 on landlines & Rs. 16-18 on mobiles for ISD calls!

[Mahidhar 3]

now that reliance has control over flag, we could expect some radical changes in outgoing ILD rates !!

[Chirag 5]

MTNL too cuts ISD rates by 25%

Rediff.com

April 02, 2004 18:49 IST

Last Updated: April 02, 2004 19:34 IST

The Mahanagar Telephone Nigam Ltd on Friday announced up to 25 per cent reduction in ISD (international subscriber dialling) rates for calls made to destinations like the United States, the Untied Kingdom and South East Asian countries.

MTNL has cut its rates in response to the 25 per cent cut in ISD, STD charges announced by the Bharat Sanchar Nigam Ltd on Thursday.

For MTNL's fixed-line and WLL customers (Garuda), the ISD charge to the US, the UK and Canada has been reduced by about 6 per cent to Rs 6 and Rs 9 per minute from Rs 6.40 per minute and Rs 9.60, depending on the tariff package subscribed to by the customer.

Here the new pulse rate would be 8 seconds compared to 7.5 second pulse earlier.

The reduction is 25 per cent in case of calls made to Singapore, Malaysia, Hong Kong, Indonesia and Thailand and customers will now pay between Rs 6 and Rs 9 against Rs 8 and Rs 12, based on the tariff package.

The new rates are effective from April 10, MTNL said.

MTNL fixed-line or WLL subscribers calling Persian Gulf countries will pay between Rs 12 and Rs 18 per minute as against Rs 16 and Rs 24 being paid by customers earlier.

The pulse rate has been increased to 4 seconds from 3 seconds.

The company officials explained that the charges payable varied depending on subscriber's package as many users were on 80 paise per call package while others were on Rs 1.20 per call tariffs package.

"MTNL's charging pattern based on smaller pulse duration as compared to other operators with minimum charge duration of 30 or 60 seconds leads to appreciable benefit for the customer who pay for the actual duration of the call," MTNL said.

For Africa, the company has decided to reduce charges to Rs 12 and Rs 18 from existing Rs 16 and Rs 24; for the rest of the world prices stand reduced to Rs 12 and Rs 18 from Rs 14.12 and Rs 21.18.

MTNL's cellular subscribers have not been left out in the ISD tariff cut bonanza, either. MTNL cellular subscriber calling the US, the UK, and Canada as also Singapore, Malaysia, Hong Kong, Indonesia and Thailand, would enjoy a 20 per cent rate cut. They will now pay Rs 12 per minute against Rs 15 per minute earlier.

Cellular customers calling Gulf region and Africa can avail themselves of a whopping 25 per cent reduction and the new rates would be Rs 15 per minute against the existing Rs 20 per minute.

The rate applicable for calls to rest of the world remain unchanged at Rs 15 per minute, MTNL said.

[yokel 0]

Hey guys,

What is the tariff for international calls now??I want the tariff for US..when will the tariffs comedown as has been the case in BSNL's tariffs?

Best Regards,

Rajesh.R