INTERNET TELEPHONY LOGS 15 PERCENT JUMP IN JULY-SEPTEMBER '07

By Deepshikha Monga & Joji Thomas Philip, New Delhi
The Economic Times

 

Internet telephony is gaining ground in India, as prices head southwards and leading Internet service providers (ISPs) expand their networks. According to the latest data by telecom regulator Trai, the Internet telephony market grew 15 percent in the quarter-ended September 2007. The quarter saw total minutes of usage grow to 129.43 million, as compared to 112.26 million minutes in the April-June 2007 quarter.

However, these are figures that don’t take into account players that operate without a licence in India. “The total usage could easily be 250 million minutes as half the market is cornered by grey market. Since such players don’t have to pay the 6 percent revenue share and 12 percent service tax, their services are cheaper than those by registered ISPs and hence, they have much more takers,” says ISP Association of India (ISPAI) president Rajesh Charia.

According to Trai data, BSNL has about 45.86 percent market share among ISPs while MTNL is ranked second with a 18.78 percent share. BSNL is in the process of finalising the companies that will provide voice over Internet protocol (VoIP) over its platform. “Internet telephony growth will be driven by reduced prices and better quality of services. BSNL is very aggressive on the broadband front, with a target of 20 million connections by 2010, and is now offering high-quality, video-enabled broadband,” says Aksh Optifibre managing director KS Choudhari.

The tariffs on services provided by MTNL and those in the offing by BSNL are as low as 10 paise per minute for PC-to-PC calls, while a call made from a PC to a landline or mobile abroad would cost a little over Re 1 per minute.

Trai, in an earlier report, had pointed out that “the quality of service offered by ISPs has improved and as a result, more minutes are likely to flow through the ISP network in future”. Based on the growth so far, Internet telephony could see usage in the range of 500-600 million minutes in 2007-08, a growth of 250-300 percent. As per Trai’s estimates, international long-distance operators (ILDOs) will account for about 3,478 million minutes of outgoing calls in 2006-07. That means Internet telephony would be equivalent to 14.3-17.2 percent of ILDO.