August 20, 2008


Fantasy world

The Telecom Regulator TRAI has proposed to ease the VOIP norms. Everybody thinks that will push the long distance and international call rates even lower.

At the user end, to get cheap VOIP you need the following
Broadband penetration is at 4mn (compare that with 300 mn cellphones.) And you won't spend Rs 6000 for a IP landline so that you can make calls cheaper.

Now, only if there is an telcom operator who uses VoIP backbone, passes on the benefits of VoIP to the end customers. But, shouldn't backbone already very cheap. I mean, the telcos have thousands of kilometers of optic fibre. So effectively, there is no advantage in technology.

The only variable remains is that of interconnect charges for carrying voice calls to different network. It can't be zero for obvious reasons. They seem to be as close to free. Makes me wonder how further down the rates can go. The only thing that can happen is 'talk and sms all you can' for a certain amount.

Just put things in perspective, early in this decade, some of the long distance call rates used to be as high as Rs 18 per minute. International calls (to USA) were charged at Rs 60 per minute. The tariffs have already crashed by 90-95 percent. They won't move down any further.

So, next time you see a telcom expert on news channel saying that long distance call rates will get cheaper, say loudly, "Liar!"


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