Monthly Archives: April 2005

VoIP is the future

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I intend to track down the VoIP business in India. I am aware of the potential that exists for revolutionising the tariffs which would go southwards.

The fact is that riding on the broadband boom, the VoIP( Voice Over Internet Protocol) would seriously dent the existing telecom plans. The fact is that the existing companies offering the fixed line telephony are illprepared to face the new challanges. Cisco is getting agressive over the Enterprise networks; there is no doubt that this is the future.

Bundled phones with VoIP providers( like Vonage) are a rage now. They are seriously challenging the established POTS players like AT&T. Fact is that technology would ultimately benefit the end consumers. It is the way one tends to survive in the changing scenario.

In this blog itself, I have pointed out that basic telephone line companies are jittery over the falling customer base. Hence broadband is only way out to survive. Fact that they would need time to catch the fancy is another matter altogther; in about 5 years time we could see an explosion of VoIP. It would be a common place to see PCO’s based on the same connected by high speed lines. How do these companies would respond to these challanges? Let the future answer this.

The “Dhaba Model” of Indian Telecom

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This blog allows me some degree of freedom to share my own personal experiences.

I had been to a “dhaba”( road side eatery in literal terms) here in Mohali where I am based as of now. The shop owner started off with serving food and as the business grew, he added on a sweet shop. With more customers, he added a general store. Each time he made sure that personal attention was devoted to maintaining the quality of food. Each individual complaint is handled personally and the prices are rock bottom. Ostensibly he believes in low margins high volume business which is far more profitable from what he would earn if he sold his stuff at fancy prices.

Important to note this is that there is no “image problem”. The fact is that families flock in and so do the people who just “hang out” there.

How is it relevant to Telecom blog? Well, for long I have been stressing on Telecom business in India. This is what I would call it as the “dhaba model” of selling products. As you introduce the plain vanilla telecom service of connecting people, value added services provide the crucial differentiation factor including the possibility of charging exclusive prices.

Riding on the advertising boom, Airtel declared huge profits. Well, frankly I am not impressed. First there is no way that their claims can be verified or atleast I am not aware of the same. Then, I have been reiterating the fact that Airtel may finally be sold off to fund Bharti’s plans in infrastructure where arguably more money can be invested for higher returns. Airtel has been consistent in huge ad spends without being able to increase it’s Average Revenue Per User(ARPU)- this fact that they deny having any importance now.

Reliance has been able to peneterate the market effectively. The believe in the dhaba model of selling. I see their advertisements only when they come out with any new scheme. Infact, very straightforward billing systems. I know that there is a potential for controversy here; fact remains that I am satisfied with their services.

Ultimately, for any new player, this dhaba model is important. This is one way that these companies can survive instead of coming out with promotional offers which does nothing but confuse the potential and existing customers. Infact there is a big scope for cheating too. One never knows that plan shifting is done without the consent or knowledge of the customer.

TRAI is sleeping over it, no doubt.

TRAI- Is it the real Boss?

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Another one of those idiocies that plays out in Indian Telecom market.

TDSAT has scrapped the order for reduction of International bandwidth rates; clearly flies in the face of logic to increase the broadband peneteration. This order comes in from retrospective effect. So we all know that it was fools day annoucement. I was guarded in my enthusiasm since I was sure that VSNL would appeal; it won too is a double whammy. A blow again to the cheap broadband access.

As per the article in Economic Times it says that TDSAT wanted TRAI to divulge in a transparent manner as to how the cut in the rates were affected. Further the article says “According to VSNL, the price ceiling set by TRAI was below the basic cost of the company”.

VSNL lost out its monopoly status in carrying international calls to BSNL. Then, it has lousy orientation to the end user and individual customer. Despite it’s advertisements, they clearly need to lead the focus on Internet if they need to survive. Frankly I feel that they have hired a good legal team which was able to force the TDSAT to go against the national interests. Being a monopoly, it feels that it can abuse it to any extent.

Strange strange. No word from Reliance or Airtel. Is it that they are sitting quiet and watching. Or is it that they would not open up themselves at this juncture. Or they have quietly ganged up together? No word from them so far. Of course, the Media would be slow to react as always and fail to question the motives behind this.