You can soon pick your best STD plan

NEW DELHI: 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 operators. 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