Shakeout expected in the international telephony segment

The ILD segment, a profitable venture for telecom operators may soon witness a new round of tariff cuts and increased competition.

MTNL is planning to launch VoIP or Voice over Internet Protocol services with tariffs as low as Re One a minute. BSNL recently started the price war by offering ISD calls to US and Canada at Rs.1.75 a minute. 

Legally, VoIP is still not fully permitted in India though PC-to -PC interface is not disallowed, but its advantageous owing to lower costs and good voice quality.

Also, BSNL has reduced international roaming tariff for foreigners using its network in the country by up to 40% forcing a round of another price cuts by private operators.

For foreigners visiting India, the tariff for outgoing local/STD call is slashed to about Rs 30 per minute from Rs 49, while an ISD call will cost Rs 70 per minute from the earlier Rs 99. For an incoming call, a person has to pay Rs 50 per minute instead of earlier Rs 75 a minute.

The only problem is that the foreigner has to be a customer of designated operators with whom BSNL has bilateral agreement.

Another player, Tulip IT Services has got licence for ILD services by DoT. This could help the company in exploiting the increasing market of virtual private network (VPN) bandwidth. According to industry estimates, the international connectivity market is expected to double from over Rs 1800 crore in 2006 to over Rs 3600 crore in 2012.