Business Today Web Exclusive

Net Telephony Kicks Off

It’s supposed to shrink the world like nothing before, thanks to super-cheap voice carriage over the Internet. Dozens of players have descended into the arena, and the competition promises to be hair-raising, as each makes a headlong dash for customers. A round-up of the latest action.

By Vinod Mahanta

Though the government finally opened internet telephony on April 1, this year, Delhi-based Net4india officially kicked off the war on April 12. National players Sify, HCL Infinet, and Caltiger, followed suit along with regional players like Icenet (in Ahmedabad) and Glide (in Chandigarh). For the ISP’s rasping for revenues, the long-awaited decision brought some respite. In the last two months, Net4india has released 1 lakh cards---Phonewala---in the market, and more than 60 per cent have been sold till date. HCL Infinet started its service recently by launching a co-branded card called Valuefon with Indiatimes. “Though not substantial in terms of revenue, the service can be offered without incurring high cost and requires only the enabling-technology for the existing infrastructure to get going,” says Jasjit Sawhney, CEO, Net4India.

ISP’s are trying different channels to woo customers. Sify, which is yet to offer a card, is using its I-way café chain (650 cafes) for its services. Net4india is in the process of setting up 500 booths---Phonewala Telecenters---across six cities (Mumbai, Delhi, Pune, Bangalore, Hyderabad, and Chennai) in the first phase of the roll-out. This will be soon extended to smaller cities within the year. HCL Infinet is using its frontline stores, access pack dealers, and the portal Indiatimes to sell its cards. Explains Saurav Adhikari, CEO, HCL Infinet: “This allows us to leverage Indiatimes’ strong brand value, 750 million page views, media power, and marketing muscle. Co-branding is a powerful marketing mantra today.”

Though every player is bullish on retail, everyone wants a piece of the real pie---the corporate segment. HCL Infinet is very aggressive on the corporate front. It has even started calling itself a XSP (X stands for any service on internet) instead of an ISP. Infinet will provide corporate customers with solutions that will enable them to make Closed User Group calls over the HCL Infinet network and also provide them with services in internet telephony. It also plans to offer toll-free voice quality, thanks to its revamped network that has a separate channel for voice. Net4india is also aggressively pushing its IP devices to corporates, mainly to the SME’s, tour operators, and exporters.

Apparently, not all ISP’s are gung ho on internet telephony. Richard Li-promoted Data Access is in no hurry to jump into PC-to-telephone services segment. “PC-to-phone services is small revenue segment of total voice market," explains Siddharth Ray, MD, Data Access. The ISP wants to wait till the government clears its ILD license. Data access intends launch its PC-to-phone card along with its ILD phone card tentatively in mid-July, so that it can distribute its marketing costs. However, other players don’t agree and argue that volumes will not be hard to attain with devices with cyber cafes and PCO-type telecentres already in place.

ISP’s have been quick to tie up relationships with net telephony players to land calls in other countries. While Satyam Infoway has tied up with Go2Call, a leading international PC-to-phone provider; Net4india has tied up with Delta3; and HCL has tied up with net2phone; Data Access has tied up with 34 telecom players for its ILD licence. Voice quality was supposed to be an issue but apparently that has not deterred customers. “The price-differential is so much that quality deterioration can be overlooked,” says Sawhney of Net4india.

Issue Contents Write to us Subscription Syndication