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The ILD communications market is expanding and providing more opportunities for growth to companies applying and receiving licenses in India. Indian companies are now aiming to provide smoother connectivity in services on a global level, and are acquiring licenses in regions like Russia, Africa, and the US.

According to Voice&Data estimates, the overall market for ILD reached Rs 15,000 crore in FY 2008-09, and the major players that ruled the charts were Tata Communications, Bharti Airtel, Reliance Communications, BSNL, AT&T, Vodafone, and BT.

Market Dynamics
In FY 2008-09, Tata Teleservices launched 'STV 76', a special tariff voucher that offers attractive international long distance (ILD) calling rates to its prepaid subscribers.

In the voice business, the focus of Reliance was to grow volumes and protect margins. In the wholesale voice segment, the company had y-o-y traffic growth of 12%. The recently proposed regulatory increase in termination charges for ILD inbound calls from 30 paise per minute to 40 paise per minute will benefit to access business and will have a neutral impact on ILD carriage.

During FY 2008-09, Reliance launched calling card portals targeted to expatriates from specific South Asian countries living in the US, Europe, and other parts of the world. There has been an excellent response and a high recall of portals among target communities, as well as a wide use of Reliance Global Call.

The company has also been actively scanning to identify high value addressable markets wherein it can launch products to take up leadership positions like Reliance Global Call. It is delivering unmatched value proposition and leveraging the global reach to more than forty countries. Its online service delivery, a carrier relationships, and a ready customer base in the US and Europe are major contributiors to its success.

Sify has licenses to operate NLD and ILD services and offers VoIP backhaul to long distance subscriber telephony services.

In another development, telecom service provider Pacnet has increased its stake in its joint venture with Future World India to 74%, and is expected to apply for ILD and NLD licenses very soon. It is currently offering Internet services in six Indian cities including Chennai, Bengaluru, Mumbai, Pune, Hyderabad, and Gurgaon.

In addition, during FY 2008-09, SingTel, the largest Singaporean company listed on the Singapore Stock Exchange, grabbed the NLD and ILD licenses. As per the reports, it will hold 74% FDI in the licensed entity. Its focus would be on enterprise services initially. At present, it holds over 30% stake in Bharti Airtel.

In addition to getting the government's approval to operate as an ISP in India, Swan Telecom, another emerging player, has received the approval from DoT to offer both NLD and ILD services. The licenses will enable Swan to offer the entire portfolio of telecom services. Notably, the company has already got the licenses for fixed line and cellular services.

Furthermore, in a strategic move, Trai has increased the incoming ILD charges by 33%, to 40 paise per minute. This move is expected to be a benefit to operators in terms of more revenue generation.

In a move to garner more pie in the existing ILD space, Bharti has announced up to 50% cut in ILD telephony call rates recently.

The year gone by also witnessed the foray of Idea Cellular into the ILD business. The company has reportedly started direct routing of external calls with Sri Lanka's Dialog Telecom, and also is in discussions with some European countries for agreements with global carriers.

Verizon Business, another emerging player of the segment, has deployed private IP nodes in cities like Bengaluru, Chennai, Hyderabad, Mumbai, and New Delhi. The company had received its ILD/NLD licenses in January 2008. Before that, it was offering network products and services to India, to its multinational customers through partnerships with major Indian carriers for many years. The company boasts of making significant investments since receiving its ILD/NLD licenses in January 2008.

In order to accost the remunerative markets of Asia, Cable and Wireless had reportedly invested around $30 mn to roll out its multi services platform (MSP) in India.

Outlook
In the present business environment, there has been a steady demand for high capacity, better availability, and a guaranteed latency network to support the complex business needs of the consumers.

The ILD activities of Indian players are banking on the growth in the Asian region. As the large players will only be getting larger, the war of the Indian companies' ILD operations will be fought at a global level, with India becoming only a small part of that business.

With growing competition, Indian operators are reshaping their strategies and pulling up their socks to utilize the incredible growth potential available.

While the market itself is getting bigger day by day, there are plenty of hurdles that are making a headcount. Quality of service, customer focus and support, and network rollout will be the key differentiators for any operator to keep ahead in this business

In the current market landscape, where unified communication applications are on the radar of most of the companies, investments in VoIP, and similar technologies are expected to fuel the growth in the long distance connectivity market.

Jatinder Singh
jatinders@cybermedia.co.in