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Reliance, Data Access take telecom rate war to US

New Delhi, Feb. 3: Reliance and Data Access — two private players that handle overseas call traffic — are looking to sharply pare ISD tariff by as much as 50 per cent very shortly.

Both Reliance and Data Access have acquired licences in the US to offer international long distance and national long distance services that aim to substantially reduce the cost of international calls made by Indians from US to India and other parts of the globe.

Once this happens, international calls made from India to the US and other parts of the globe will also come down. At present, such calls are charged at the rate of Rs 24 per minute.

The two operators will provide the interconnection to the last mile operators in India like Bharti, Bharat Sanchar Nigam Ltd, Mahanagar Telephone Nigam Ltd and other countries through their points of presence (PoPs) in these countries. At present, India is connected with one international carrier while China has three.

Data Access is also planning to pick up more licences in European countries, Canada, South America, Latin America and Bolivia. Reliance and Data Access have both picked up the ILD licence in the US for just $ 870.

This licence will allow the two companies to directly interconnect with fixed line and wireless service providers in North America. The licence will also allow both the Indian companies to become NLD operators in the US while Reliance be able to offer similar services in the UK. Data Access has already bagged a similar licence in the UK and Hong Kong.

The two companies have set up a fully-owned subsidiaries — Reliance Communication Inc (US) and Data Access America Inc — to acquire the licences.

While RCI has already established two points of presence (PoPs) in the US at New York and Los Angles, Data Access has set up PoPs at New York, Miami, Florida, Denver, Los Angeles and Jersey City; it already has PoPs in Montreal, London, Hong Kong , Cyprus, Dubai, Bahrain, Delhi, Mumbai, Chennai, Bangalore, Calcutta and Singapore.

Data Access has set a target to rake in revenues of $ 150 million by the year-end. Out of this, the company expects to generate $ 40 million from Latin America and Mexico, $ 30 million from Europe, $ 20 million each from India, West Asia, Asia, China and the US.

“We expect to match the revenues from India and overseas revenues by year end. During the year we also expect to acquire seven to eight ILD licences in various other countries where there is big business for us,” said Siddhartha Ray, founder and managing director, Data Access (India) Ltd.

According to a senior executive in Reliance Infocomm in Delhi, “This is a strategic necessity for any future business operations in the telecommunications sector. The acquiring of licences in other countries will help our scheme to bring down the cost of calls not only locally but also in the worldwide market. We expect a few more companies also to join in this race, but as early movers we will have an edge.”

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