Relevancy to the Market « Daily Blogs!

2005, Oct 22

Relevancy to the Market

Filed under: Uncategorized — Hrishikesh @ 16:16

There was this article at /. about the VoIP backlash from phone companies. To give a gist: Telecom Companies in certain nation such as France, Germany, Egypt and Saudi Arabia are blocking VoIP packets, including Skype.

The motive behind this is not difficult to decipher. It makes sound business decision for the telco, especially so, because most telcos in the world currently rake in the moolah from PSTN and international calls. VoIP will blow this revenue away.

I, however, feel that they are shooting themselves in the foot. The entire world will shift to VoIP, because it is cheaper than the conventional way of maintaining a link between the caller and the called. The market is changing.

Telcos with long-term planning will notice this, and try and adapt. They’ll try and become relevant to the current market by introducing their own VoIP plans, at dirt cheap rates. There is a lot of money to be made, even today, by providing more connections at cheaper cost. Any student of Economics 101 will tell you about the demand and supply curve.

Short-sighted telcos, instead, will try to keep the market relevant to their current infrastructure, and try and force obsolete and expensive technology down the customers’ throat. This will only blow the company off into obscurity, making them irrelevant to the market. It’ll soon be their end, as the enlightened customer will move to better plans.

How is this relevant to India?

We already have the cheapest cellular call rates in the world. Unfortunately, the penetration is still low. Why? Because the dollar is not what most Indians earn in. You cannot say that vis-a-vis the entire world, the Indian telecom industry is the cheapest. No sir, it would be unfair to compare two rupees to five cents. It’s not like the infrastructure cannot be provided. It’s more of profit-mongering. “Go even cheaper. You’ll earn by the numbers.” Alas, they don’t think so.

And don’t even get me started on the internet. India has huge bandwidth coming to it’s shores by way of two undersea cables. Where does this bandwidth go? Nowhere. It’s mostly under-utilized. Why? Because the ISPs and telecos have created an artificial scarcity by limiting the bandwidth that one actually gets for any substantial expense.

This is really stupid. The connections that MTNL / BSNL sells under the name of broadband is a joke. Of what use is a 256 kbps connection, if I cannot download stuff on it? What the hell is a 500 MB limit? It won’t last me a day! And they can get away with it, because no other company sells anything to compete with it… Why? Because all the other companies too follow the same policy and earn more (or so they think).

Get relevant people. India needs bandwidth to do any sort of progress. It is stupid to expect people to go online, and pay exorbitant amounts for the same. Insane infrastructural supply! Japan allows tens of Mbps with free local phone calls, and 100 TV channels along the same fibre for less than $40. Where is the MSO initiative that was coming from Reliance and VSNL?

It’s the same for cellular service providers. Be it Airtel, BPL or Orange, all of them more or less charge the same air time rates (with the exception of Dolphin, which though a good service, suffers brand un-recognition due the advertisements from the other brands). Now, even if one of the said providers were to reduce their rates by a fraction, people would go to them. Yes, we are all waiting for the number portability law.

The problem is not so much that these companies will suffer loses. They won’t. But because infrastructure is expensive, India as a whole may become irrelevant to the market. (Yes, it is cheaper than the world, but it can be cheaper than this, especially because once the fibre is set up, you have oodles of bandwidth.)

Go the whole distance, let us see what we geeks dream of: a real high speed connection with voice, data and multimedia. Get relevant. Or lose out.

===============

My Hathway connection is up and running. I really love these people. They are listening to me! I am getting speeds slightly less than 256 kbps, but still substantially faster than my earlier connection, and it’s just awesome, at a decent enough charge. This is how it should be, everywhere.

Comments (14)

http://www.blogger.com/profile/3642543 Aditya

Its exactly what happened when dolphin entered the fray. Orange and BPL were charging six bucks for the minute that time. till MTNL said “Ok, would you folks like two bucks?”

Bang.

Waiting for this to happen in broadband to some end, but sadly VSNL has already been sold, for some effort can come only thru govt initiatives. private enterprises in small numbers = bastards who will suck the money out of you.

You want the best example?

Printing ink. Per milliltre, it is more expensive than champagne. Do you really think it costs that much to make?
http://www.blogger.com/profile/3642543 Aditya

Its exactly what happened when dolphin entered the fray. Orange and BPL were charging six bucks for the minute that time. till MTNL said “Ok, would you folks like two bucks?”

Bang.

Waiting for this to happen in broadband to some end, but sadly VSNL has already been sold, for some effort can come only thru govt initiatives. private enterprises in small numbers = bastards who will suck the money out of you.

You want the best example?

Printing ink. Per milliltre, it is more expensive than champagne. Do you really think it costs that much to make?
http://www.blogger.com/profile/5164138 Hrishikesh

AFAIK, the two bucks thing happened cause Reliance, and not Dolphin.

Ink does not cost. Printers do. And they don’t really charge you for those, do they? Nothing really prevents you from using a third party ink, especially since some court over ruled the warranty-void-if-you-do-not-use-our-ink ideology. But yes, I get your point.
http://www.blogger.com/profile/5164138 Hrishikesh

AFAIK, the two bucks thing happened cause Reliance, and not Dolphin.

Ink does not cost. Printers do. And they don’t really charge you for those, do they? Nothing really prevents you from using a third party ink, especially since some court over ruled the warranty-void-if-you-do-not-use-our-ink ideology. But yes, I get your point.
http://www.blogger.com/profile/5154159 rohit bhute

That MSO thing is being held back by your (our?) friendly local cable operator. And as for un-utilised bandwidth ( or rather, bandwidth not being opened up by companies like VSNL), thats because the government waves the flag of “Telecom penetration in rural areas” whenever the talk of opening up bandwidth and lowering rates to a sane level are proposed. Given the dismal conditions – economic and political – in our hinterlands, no company is ready to be the first one out of the paddock.
http://www.blogger.com/profile/5154159 rohit bhute

That MSO thing is being held back by your (our?) friendly local cable operator. And as for un-utilised bandwidth ( or rather, bandwidth not being opened up by companies like VSNL), thats because the government waves the flag of “Telecom penetration in rural areas” whenever the talk of opening up bandwidth and lowering rates to a sane level are proposed. Given the dismal conditions – economic and political – in our hinterlands, no company is ready to be the first one out of the paddock.
http://www.blogger.com/profile/3642543 Aditya

Nyet Hrishi – it was Dolphin and Garuda. Reliance came much much later. I remember BPL had a full page ad in the ToI that said “Mumbai’s #1 welcomes Mumbai’s #3″

Wonder where *they* are now….
http://www.blogger.com/profile/3642543 Aditya

Nyet Hrishi – it was Dolphin and Garuda. Reliance came much much later. I remember BPL had a full page ad in the ToI that said “Mumbai’s #1 welcomes Mumbai’s #3″

Wonder where *they* are now….
http://www.blogger.com/profile/2520008 Vikram

Yes sir I totally agree with your point of view.

Few things i found really cool about Reliance internet though.

I could take the mobile handset (the ones they call a landline) and connect it using USB and sit in any room in the house or garden and still use Internet.

However the service is horrible and i tended to use/spend hardly any time on the Internet.

They really need gigabit internet backbones like NL.
http://www.blogger.com/profile/2520008 Vikram

Yes sir I totally agree with your point of view.

Few things i found really cool about Reliance internet though.

I could take the mobile handset (the ones they call a landline) and connect it using USB and sit in any room in the house or garden and still use Internet.

However the service is horrible and i tended to use/spend hardly any time on the Internet.

They really need gigabit internet backbones like NL.
http://www.blogger.com/profile/5164138 Hrishikesh

Reliance has of late disabled the mobility of their WLL phones. If I take my Reliance IndiaPhone to another room of my house, it will not dial: “Dear Customer, you are using a fixed phone. It will work only in the location you have registered it.”

Well, they can determine my location within a few meters. Ooh, I am scared now! Though, yes, I’m aware that a cell phone can be traced with the same resolution. Ah, such is technology!
http://www.blogger.com/profile/5164138 Hrishikesh

Reliance has of late disabled the mobility of their WLL phones. If I take my Reliance IndiaPhone to another room of my house, it will not dial: “Dear Customer, you are using a fixed phone. It will work only in the location you have registered it.”

Well, they can determine my location within a few meters. Ooh, I am scared now! Though, yes, I’m aware that a cell phone can be traced with the same resolution. Ah, such is technology!
http://www.blogger.com/profile/3642543 Aditya

dont think they can trace you just by that…. but if they did try hard enough they could. right now they prolly have only the intersection area between two circes…. they need three for a “fix”.
http://www.blogger.com/profile/3642543 Aditya

dont think they can trace you just by that…. but if they did try hard enough they could. right now they prolly have only the intersection area between two circes…. they need three for a “fix”.