Gana, you made a valid point. However, it would be difficult to quantify thee exact revenues after this is introduced; if you read the ZEE report, there in it's mentioned that BSNL estimates the losses to be around 5000 crores. That's what prompted me to write back.

Individual experiences cannot be generalised. This is the trap I have to avoid on a continual basis.

This is indeed a fallacy that more people would use it as a result of falling rates. The total cost of ownership needs to be factored in.

Gana, you made a valid point. However, it would be difficult to quantify thee exact revenues after this is introduced; if you read the ZEE report, there in it's mentioned that BSNL estimates the losses to be around 5000 crores. That's what prompted me to write back.

Individual experiences cannot be generalised. This is the trap I have to avoid on a continual basis.

This is indeed a fallacy that more people would use it as a result of falling rates. The total cost of ownership needs to be factored in.

I disagree on one point -"I really doubt whether the increased volumes would actually be able to recoup the losses. If I have to talk for a certain period of time, I would do so regardless of the present structure. Still, it remains to be seen as to how the things would work out."
If we look at the way the tariffs have dropped over the last few years, and still the telcos remain viable indicates otherwise. I usually chat up with STD booth owners once in a while - they too indicate that the reduction in STD rates has lead to increased business over the last few years - more people talk, and they talk more, as it is more affordable.
People who do use STD regularly would probably use it for a longer time duration, but their total spending on STD per month may not increase drastically. But because of the reduced rates, more people start using the facility, and it is these new users who contribute to the increased volumes. As the telecom penetration is low, there is a lot of scope to bring in new users and thus remain economically viable.

I disagree on one point -"I really doubt whether the increased volumes would actually be able to recoup the losses. If I have to talk for a certain period of time, I would do so regardless of the present structure. Still, it remains to be seen as to how the things would work out."
If we look at the way the tariffs have dropped over the last few years, and still the telcos remain viable indicates otherwise. I usually chat up with STD booth owners once in a while - they too indicate that the reduction in STD rates has lead to increased business over the last few years - more people talk, and they talk more, as it is more affordable.
People who do use STD regularly would probably use it for a longer time duration, but their total spending on STD per month may not increase drastically. But because of the reduced rates, more people start using the facility, and it is these new users who contribute to the increased volumes. As the telecom penetration is low, there is a lot of scope to bring in new users and thus remain economically viable.