We are looking at outbound calling card opportunity in India

What are the latest trends in voice solutions?

The voice business across the world is undergoing a change. A lot of
traffic-both retail and wholesale-is now migrating to IP. The world is fast
embracing VoIP. However, in India it is bound by regulatory constraints. The
traffic is basically driven by low cost unit/min. But I see the environment
growing complex now than it was in the past. We are already handling clients in
about fifty-six countries that have adopted mobile number portability, and in
about half of them a good number of subscribers have ported their numbers. There
are other challenges like managing high economies of scale. We handle about 30
bn minutes of international roaming in a year. Also the economic crisis has lead
to credit management.

A major boost that Tata Communications has got is from the $1 bn voice
outsourcing deal to supply BT international direct dial (IDD) and other voice
termination services outside its own footprint. We have a voice outsourcing
partnership and network expansion project with Australian communications
supplier of retail domestic and international voice services, gotalk. We are
hopeful of such tie-ups in India as well.

How about the pattern of wholesale volumes?

The market has traditionally been growing at 10% y-o-y. Due to the economic
turmoil, the rate of growth fell substantially. Asia, however, has been strong.
India and China have been driving the growth in the region. Our market share may
have shrunk, but the absolute number has been picking up.

With the Government of India bringing down the entry level fee for ILD,
the competition has intensified. Has it made the scenario worse?

We do not see these new entrants as our competitors. Instead we view them as
an opportunity. These small players have the license but do not have an
infrastructure that is robust enough to support the traffic independently. They
are eager to partner with big players to reach higher levels of efficiency.

What are the plans to guard yourself against pricing pressures?

I agree, there is a lot of pressure on price, and the margins are slimming.
The risk has increased manifolds, and that has forced the players to think if it
is worth being in the market. This is why we are seeing players diversifying
their profiles and growing in areas such as managed services, security,
broadband, etc. We are looking at outbound calling card opportunity.

Heena Jhingan

heenaj@cybermedia.co.in