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Domestic ISD tariffs still too high

Thomas K Thomas

Despite the steep cuts in international call rates announced by Bharti on Monday, a consumer in India will still have to cough up anywhere between 100 and 400 per cent more than what carriers like Sprint, MCI Worldcom and Singapore Telecom charge their subscribers in the US and Singapore.

This is expected to remain so inspite of Videsh Sanchar scheduled to come out with its offer soon.

For instance, while a call from India to the UK on Bharti's network will be priced at Rs 24 a minute, a caller in the US can make a call to the UK on a carrier like MCI Worldcom at less than Rs 5 a minute. Similarly, a SingTel customer can make a call to the UK from Singapore at Rs 13 a minute.

Compared to the price of a phone call from India to the US at Rs 24 a minute it costs just above Rs 10 for a call from Singapore to Washington.

Even when it comes to making a call to a regulated market, the ISD tariffs in India are on the higher side.

For instance, a call to China on Sprint from the US costs only Rs 15 a minute.

Analysts point out that the difference in international long-distance tariffs in India and other markets is primarily because of three reasons.

First, until now there was no competition in the Indian market, second the ISD tariffs in India had always been pegged artificially high to subsidise the fixed-line operators for the low local-call tariffs and most importantly the Telecom Regulatory Authority of India is not pushing the operators to lower the tariffs.

"The reduction in tariffs depend on the volumes the companies are able to pick. The more quickly they get returns on their investments the faster the tariffs will come down," said Jasjit Sahni, chief executive officer of Net4India, which is also planning to enter the ILD segment in June.

The prices set by Trai are also of not much help as the ceilings set by the regulator are already above what Bharti, and soon VSNL will offer.

Pointing out the ineffectiveness of the regulator in lowering international tariffs a senior industry executive said: "The market is ahead of the regulator. The ceiling announced by Trai from April 1 onwards does not make sense as the tariffs charged by the operators are already well below the prescribed limit. Trai should have by now pre-empted a multi-operators scenario and fixed a ceiling that would have been in line with the international trends."

According to N Arjun, chief executive officer, Bharti Telesonic, the tariffs are expected to go down in two stages.

"While the tariffs will drop but it will not be as dramatic as one saw in the case of STD rates," said Arjun.

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