You can soon pick your best STD plan

You’ll soon get to choose the cheapest STD and ISD tariffs,
irrespective of your service provider. After recommending that
internet telephony be opened up, telecom regulator TRAI this week will
mandate that telcos offer their subscribers the freedom to choose a
carrier of their choice for making long-distance calls, whether
domestic (STD) or international (ISD).

This will start a new era of competition in long-distance calls,
provided the government acts promptly to amend licence conditions to
enable telcos comply with the TRAI directive.

What TRAI has in mind is not quite implementation of the carrier
access code (CAC) project mooted several years ago. In the face of
resistance by telcos to CAC and the willingness of the Department of
Telecom (DoT) to play along with them, TRAI has come up with a
variation. This is how it will work. Suppose, you are a Bharti
subscriber and you find out BSNL is offering the cheapest long-
distance tariffs.

You then buy a pre-paid long-distance package from BSNL for a specific
duration. You punch in a set of numbers specified in the package to
get on to the BSNL network, and then proceed to make the long-distance
call you wanted to, and talk for as long as your pre-paid package
permits.

The regulator will also mandate that all telcos offer their customers
the facility to purchase pre-paid long-distance packages or virtual
calling cards on the internet. Globally, long-distance tariffs have
fallen between 20% and 53% after customers were allowed to choose
their operator. Even players like PowerGrid, RailTel and Gail, who
have long-distance backbones, can offer this facility along with
telcos that provide customer access.

The TRAI directive is bound to hit the bottomlines of major operators.
Telecom stocks were already down on Tuesday following TRAI’s
recommendations on net telephony.

Net telephony may hit telcos’ bottomlines

Because, if the DoT accepts TRAI’s proposals on net telephony, it will
adversely impact the business models of all telcos. In Tuesday’s
trading, Idea Cellular was down 5.05%, Reliance Communications fell
3.06% while Bharti Airtel and Tata Teleservices slid 2.1% and 1.8%,
respectively.

ET has learnt that TRAI has decided on this move as the DoT has failed
to implement the much-delayed CAC. The implementation of CAC would
have allowed subscribers to choose the long-distance operator of their
choice to make STD/ISD calls without having to purchase any pre-paid
package.

Telcos have always opposed CAC on the grounds that each player will
have to shell out about Rs 5,000 crore for network upgradation before
they can offer this facility.

“Allowing consumers the freedom to choose their long-distance service
provider over pre-paid packages is our answer to DoT’s failure to
implement CAC. TRAI will no longer push for the implementation of CAC
and the issue will be buried. Under the new system, telcos can no
longer complain about network upgradation costs and stop its
implementation. All telcos have intelligent networks in place to
handle this service,” a top TRAI source told ET.

“This will be a directive to telcos. We will ask the DoT to make the
requisite changes in the licence conditions of telcos so that they can
offer this facility,” the TRAI source added.

TRAI officials also say that in addition to increasing competition
among service providers, offering customers the freedom to choose
their long-distance operator will also open up revenue streams for
other long-distance licence holders. For instance, players such as
PowerGrid, RailTel, Gail, Sify, AT&T, British Telecom and Tulip
Telecom, among others, who have fibre networks in India can now
directly compete to carry calls of ope rators. This implies, Bharti,
Vodafone or Idea customer can now specifically buy a package from Gail
or PowerGrid to carry his STD calls if these companies offer cheaper
tariff rates.

TRAI sources also added that all long-distance carriers would have to
enter into mutual agreements. “In case operators do not agree on
interconnect agreements, we will step in and facilitate timelines and
also stipulate penalties for delay in signing contracts and
implementation,” they added.

This facility will, however, not be extended to local calls. Several
NLD operators have pointed out that due to large volumes of local
calls, customers prefer to work with incumbent operator. Besides,
globally extending this facility for local calls have not yielded
customer preferences and they have continued to use the incumbent
operator.

Source: Economic times