Good News! Std Rates Set To Dip 10 Pc

[Puneet 0]

Good news! STD rates set to dip 10 pc

TIMES NEWS NETWORK[ WEDNESDAY, AUGUST 24, 2005 01:39:49 AM]

NEW DELHI: National long distance (NLD) prices are set to drop by at least 10%, as the Department of Telecommunications (DoT) has issued a policy directive to the Telecom Regulatory Authority of India,(Trai) saying the access deficit charge (ADC) should be levied on the basis of a percentage share of annual revenue and not on a per-minute basis.

This will lead to a drop in tariffs of over 10% for cell users. The new policy will benefit over 100m users of fixed and mobile telephony. ADC is now levied on a per-minute basis.

The new policy will remove the main hurdle in the way of communications minister Dayanidhi Maran’s plan of ‘One India tariff’, which seeks to remove difference between local and STD calls.

Under the existing ADC policy, operators have to pay 30 paise as ADC to the government for every minute of NLD call.

ADC is a charge imposed on long distance services and passed on to fixed line access providers who are mandated to provide services below cost. ADC is followed all over the world whenever the market is opened up for competition.

The policy directive to Trai also says that no ADC should be levied on revenues generated from rural subscribers paying the regulated tariffs. On international calls, the directive says that the ADC on revenues earned from ISD calls should be higher than that on NLD calls.

The directive also says that access providers should be allowed to negotiate termination charges for international calls terminating/originating from their networks.

This is likely to create confusion as some access providers may ask for rates that are way above the prevalent rates, which may make ILD operations unviable.

[SexyGurl 0]

Unlimited RIM-2-RIM all over India is surely going to come. Big question is the price !

For Unlimited STD on FWP ... it costs 770 per month.

1. Either they will drop the rates on the FWP unlimited STD to say 600 or 660 per month ... .and introduce a 770 p.m. voucher for RIM.

2. Else (if they are really grrrreedy), they'll retain the 770 for FWP, but introduce a 880 or 990 unlimited STD for RIM.

I think the 1. will work far better, even for reliance ..... Unlimited STD on RIM is going to be a killer.

[ashoksoft 83]

Thatz good news... but yes the factor of feasiblity is surely going to arise...

Cheers

Ashok

[saikatmandal 0]

Th unlimited RIM-RIM STD is badly awaited. I wish they do something like that soon.

[ashoksoft 83]

yeah... one more in the wait!

cheers

Ashok

[Ramchi 0]

I really doubt unlimited STD (RIM-2-RIM); this would limit their revenue and surely Ambanis would not like!!!

If I can make calls for 2000 minutes per month and avail unlimited incoming calls [including out of circle] for Rs 1200 I would be fine. Or, 3500-4000 minutes including incoming for Rs 1200 & no roaming charges.

I think, only Reliance is providing unlimited free minutes. We must appreciate Ambanis for that.

[abhay 0]

hmmm lemme be even more futuiristic

1) how about unlimited local callz(to ne network)*

2) unlimited std to reliance phones all over india*

3) chargable std callz to other networkz*

*all but after a montly rental of say 500 may be furthermost 1000 what say ;P

[Chirag 5]

*all but after a montly rental of say 500 may be furthermost 1000  what say ;P

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With this we'll surely get all networks busy all time

umm, unlimited std is still a distant thing. This is jus a policy intimation to TRAI. now how TRAI goes on implementing it is to be seen. And more over, ADC has not completely gone. Am i making out the right thing out of this article? Puneet will be able to put more light on this...

[Puneet 0]

I am waiting to lay my hands on the actual communication from DoT to TRAI to delve on it further. But what I get from the news is that DoT has asked TRAI to change ADC from per call basis to revenue share basis. Now, it all depends on the % TRAI fixes as the revenue share for ADC. And I do not see unlimited STD calls still (Hope I am proved wrong). We get unlimited calls from RIP because Reliance gets to retain the ADC with itself.

Also, if we club this with yesterdays news release where DoT has raised objection on preferntial tariffs for on-net calls, unlimited STD calls are still a while away.

[ashoksoft 83]

Crossed Fingers ... and a prayer to see STD free ! for RIM2RIM *(I would even love it if they had a voucher for say Rs. 1200 or 1500 but unlimited local calls to any network!!!!)

Cheers

Ashok

[anujit 0]

Unlimited STD wont happen until they remove ADC. And one must really convince Ramchi thats the real issue. Not the Ambanis (or free calls in the USA)!

[SexyGurl 0]

Sirs, Sirs .... look at it from shrewd financial angle, and you would immediately note the difference between a per minute ADC and a revenue share ADC.

Why is reliance not offering unlimited Rim-2-Rim STD right now on RIM?

Because ADC is per minute.

Therefore a 770 voucher for unlimited STD is not possible: Reason- You pay reliance only 770. Reliance needs pay BSNL 30 paise per minute of STD you call (even for STD to another RIM).

So, if you were to use (say) 400 minutes on rim-std ... reliance would still need to count the minutes and pay 400x0.3=120 rupees to BSNL.

If someone were to use (say) 2400 minutes ... 720 RUPEES !!!!! entire receipt of reliance is wiped out !!!

So, for RIM, is not possible, under a per minute ADC.

Why it works for RIP -- because even if someone calls 2400 minutes of rim-std... ADC is still Rs. 720 ... but reliance keeps it with itself. (So, you call 400 minutes or 2400 .. doesn't matter monetarily to reliance on account of ADC).

How would a revenue share based ADC "enable" unlimited Rim-2-Rim?

If reliance sells a 700 card (without service charge) ... and ADC is fixed at (say) 5% .... revenue share ADC means, reliance pays only Rs. 35 ADC to BSNL (IRRESPECTIVE OF THE NO. OF MINUTES OF STD, THE CUSTOMER CALLS). So, you call 400 minutes or 2400 minutes .. the ADC paid by reliance to BSNL (on account of you) ... will only be Rs. 35/-. Now there's a solution ... simply charge your 700+35+(service charge on 735 = about 73.5) ... So, at 5% revenue ADC, an unlimited rim-std is saleable for about Rs. 800 .. Got it?

The biggest question: Why is Reliance the biggest gainer, if revenue ADC is introduced?

Answer is simple: The 80,000 kms. of optic fiber backbone !!! All laid out across India ... and only a fraction of it's capacity being used.

It does not cost reliance even 1 additional paisa to take your voice call from delhi to mumbai.... The capacity of optic fiber is SO HUUUUUGE .... there is no f*kking way to fill it up in toto. ALL 1 BILLION Indians can keep shouting into their phones .... and that kind of capacity in the optic fiber will take it, without noticing. It's a TERABIT network. (By the way ... the reason for creating that huge capacity was for heavy bandwidth guzzling uses .. Video-on-demand at DVD quality .. simply demands a huge bandwidth .... if 20 users are watching a movie from internet ... the movie is sent over the network in 20 copies .... you can calculate the bandwidth needed at level of the fiber backbone). Voice traffic is puny in size for terabit capacity fiber backbone.

Anyway, back to our point: So, who loses?

All other operators ... none has the capacity in place to support unlimited shouting by 1 Billion Indians. (BSNL is the only exception .. .it has something like 150,000 kms of optic fiber ... but one, the capacity of the fiber is less than reliance's. Two, a huge amount of that capacity is already leased to other telecom operators .. .hutch, tata, idea .. and to airtel, where it's own fiber is not available + BSNL capacity is also sold to corporate lease lines).

No other operator (except reliance) , can support an unlimited STD, even after a Revenue share based ADC.

Implication --> An unsymmetric competitive advantage for reliance. It could start collecting 800 rupees from people (by giving unlimited std benefit, sure), but incurring NO COST to itself !!!! And competition is in no position to match it.

A second but related issue is the local loop ... because to carry the unlimited STD, not only the fiber optic is needed .. but also those CDMA towers, which connect the wireless phone to the fiber backbone. But then intra-circle unlimited calls are easily being supported by the same towers.... I don't know how much capacity on that local loop front is filled up (because of 440 type cards) ... but in general, CDMA is cheaper on a per line of local loop provided -- one tower can handle about 6 times the subscribers handled by a GSM tower, though cost of CDMA tower is just about double. Looks like the current CDMA towers of reliance have reasonable capacity to pick-up more minutes.

So, unlimited STD looks like a viable proposition .. but just for reliance.

The only roadblock is the per-minute ADC.

Edited August 25, 2005 by bhutes

[Puneet 0]

Agree with you bhutes.

But as I said, there have been 2 news releases in the past 2 days, one about ADC and the other about non-discriminatory tariffs. And if you club the two together, there might be some difficulties in continuing with the unlimited on-net pack without offering the same for off-net. As the termination charges are still on "per-call (total accumulated seconds)" basis. And that is why I said, "I hope I will be proved wrong", as unlimited RIM-2-RIM STD will be a dream come true.

[anujit 0]

Good point Bhutes.

Also BSNL/DOT tends to lose a lot of money they would have otherwise got without lifting a finger. They wont allow a fixed revenue basis since the loss would be too high for them! Lazy bums!

Because they get around 30/80p ADC per call depending on distance. Operators charge between Rs. 1-3 for these calls.

Assuming 80p ADC (more than 50 kms)... assuming Rs. 1.20 /call you get a max of 583 minutes of talktime for Rs. 700. Where you get an ADC of Rs. 466. Why would they settle for Rs. 35?

[SexyGurl 0]

Yeah, Rs. 35 was just an example.

If the revenue share % for ADC is not 5%, but 20% .. the same logic works .. but for a higher amount.

For a revenue of Rs. 700, ADC payable by reliance would be Rs. 140/- .. so it'll simply pass the higher charge to customers: 700 + 140 (+10% service charge=84) = about Rs. 950 prepaid card for RIM (as compared to 770 for RIP).

I will be very surprised if ADC revenue share is more than 20% !!! whenever (& if) it comes

[Ramchi 0]

I don't mind if Reliance gains monopoly which benefits the customer! If they have invested in laying FO cables then Reliance deserves to go monopoly on atleast RIM-2-RIM calls.

BSNL always s**ks though they have better coverage. Those inefficient people will not allow the customer to enjoy benefits rather their employees only will enjoy free calls!

[Puneet 0]

Currently, ADC is 30p for all distance slabs. The only variable component as of now is the Transit Charges paybale to NLD operator.

Now the ball is in the TRAI's court and hope it would not disaapont us all

@ Ramchi: Monopolies of all kinds are bad for the market. Consider, Reliance wipes out all competition by its unlimited STD and then hikes its rates at its own whims and fancy . So we do need competition, and with that I mean real competition in the market. Not something that existed in the mobile market before the entry of the fourth operator and Reliance.

[abhay 0]

Sirs, Sirs .... look at it from shrewd financial angle, and you would immediately note the difference between a per minute ADC and a revenue share ADC.

Why is reliance not offering unlimited Rim-2-Rim STD right now on RIM?

Because ADC is per minute.

Therefore a 770 voucher for unlimited STD is not possible: Reason- You pay reliance only 770. Reliance needs pay BSNL 30 paise per minute of STD you call (even for STD to another RIM).

...

Anyway, back to our point: So, who loses?

All other operators ... none has the capacity in place to support unlimited shouting by 1 Billion Indians. (BSNL is the only exception .. .it has something like 150,000 kms of optic fiber ... but one, the capacity of the fiber is less than reliance's. Two, a huge amount of that capacity is already leased to other telecom operators .. .hutch, tata, idea .. and to airtel, where it's own fiber is not available + BSNL capacity is also sold to corporate lease lines).

No other operator (except reliance) , can support an unlimited STD,  even after a Revenue share based ADC.

...

So, unlimited STD looks like a viable proposition .. but just for reliance.

The only roadblock is the per-minute ADC.

38955[/snapback]

Yeah, Rs. 35 was just an example.

If the revenue share % for ADC is not 5%, but 20% .. the same logic works .. but for a higher amount.

...

I will be very surprised if ADC revenue share is more than 20% !!!  whenever (& if) it comes

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GOOD ANALYSIS BHUTES

i totally agree with your point that reliance has exponential bandwidth capacity so i can handle a huge customer base!!!

hmmm hey by the way thankz for explanin the revenue share adc the example was really intutive

[Mukul 0]

I agree with that too.

[saikatmandal 0]

very well bhutes... appreciate that!!

cheers

[atulkathuria 0]

Yeah, Rs. 35 was just an example.

Good quote...........I agree with all of you but guys unlimited std or local calls to another operator(other then RIM) is dream for all of you because you had taken ADC in account but you forget terminating charges to be paid to other operator and it will be continue.

So it will be impossible for any operator to provide unlimited free std calls at other provider network. Two year back Mr Mukesh Ambani gave perposal to DOT to remove terminting charges but still it is pipeline.

so guys.......... donot hope more.

Edited August 26, 2005 by Chirag

[abhay 0]

Good quote...........I agree with all of you but guys unlimited std or local calls to another operator(other then RIM) is dream for all of you because you had taken ADC in account but you forget terminating charges to be paid to other operator and it will be continue.

So it will be impossible for any operator to provide unlimited free std calls at other provider network.  Two year back Mr Mukesh Ambani gave perposal to DOT to remove terminting charges but still it is pipeline.

39110[/snapback]

you should not forget before reliance even free incomming callz was a dream leave the tarrifs comming down frm 17 rs /min to 0.30 rs / min

Edited August 26, 2005 by Chirag

[ashoksoft 83]

So atleast for the near future ... we have Reliance as the only company giving RIM2RIM free!

Cheers

Ashok