The Telegraph
Since 1st March, 1999
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Foreign phone players cry foul at call thieves

Calcutta, July 13: International long-distance (ILD) telephone operators have raised an alarm at the way the gray market has snatched away 50 per cent of the calls that should have legitimately been routed through them.

The gray market, estimated at Rs 1000 crore annually, could swell to Rs 1800 crore by this year, unless regulated. “There has been a 30 per cent to 35 per cent movement of voice traffic from the legal to illegal operators over the last two to three months,” says . Arjun, CEO of Bharti Telesonic.

In 2002, the annual ILD outbound traffic was 600 million minutes, while incoming was 2.6 billion minutes. This is expected to go up to 800 million minutes of outbound traffic and 3 billion minutes of incoming calls. By contrast, grey route traffic could go up to 3.5 billion minutes this year from 2 billion minutes in 2002.

Explaining the effect of the gray market on revenues, Siddhartha Ray, managing director of Data Access-India, says: “When a call is made from an overseas destination, the legal operator pays Rs 5.50 as termination charges to the domestic basic operator. The illegal operator passes off the incoming traffic as a local call and incurs a cost of 0.50 paise as he skips termination charges. This also means that the revenue margins shift from the local operator to the overseas operator, who pays 7-8 cents against 13 cents through the legal route.”

The gray market works through call centres, which are used as fronts to give the legitimate ILD operator a miss, and are used to route traffic from foreign destinations.

Resellers of ILD operators overseas have arrangements with illegal exchange operators in India, who receive calls and transmit them to illegal exchange operators. Another route is through the franchisees of BSNL and MTNL operating large-area EPABX facilities.

Even internet service providers (ISPs) use their leased lines to terminate international calls. “Though voice over internet protocol is legal, it can be used for communication between computers only. Licensees are not allowed to terminate calls on fixed lines,” says Ray.

The Internet Telephony Service Provider (ITSP) licence issued by the department of telecommunications currently provides no safeguards against routing international voice traffic on a VoIP network.

The Telecom Regulatory Authority of India (Trai) has appointed a task-force under the chairmanship of Harshvardhan Singh to address the problem and suggest remedies. The committee will submit its report for approval a week after its final meeting on July 15.

The task-force will take up a five-point agenda including issues related to uniform termination charges irrespective of nature of call and also consider exchange of traffic data between TRAI and other regulatory bodies like OFTEL in UK and FCC in the US.

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