Airtel voip rates, confusion and my answer

[sagar.patnaik]

Lately there has been a lot of confusion about Airtel's announcement of charging Rs 4000/GB for voip data in 3G and Rs 10,000/GB in 2G.

To clear this confusion let me tell you Airtel has also announced that they will be coming up with Voip packs to reduce rates.

Now let us see why Airtel did so and why other operators also will follow the same path.

-- Remember the times when we used to sms a lot. At that time nobody guessed that Whatsapp can cause so much impact to our messaging requirements. Result whatsapp swept the messaging market in such a way that all telcos lost 80% of their sms revenues.

-- At that moment SMS accounted for approx 5% of the total revenues so the operators could bear the loss.

-- In todays scenario in India revenues earned from voice calls by telcos accounts for 80% of the total revenues.

-- This time telcos were ready to save their business they knew its a matter of time voip would eventually come to whatsapp and other apps.

-- When you use voip you dont actually consume a lot of data hardly half MB per minute so telcos wont earn money from data usage.

-- On the other hand they will be losing their 80% revenue as using voip is far cheaper. Even if you pay Rs 250/GB. Per minute voip call will cost you 10-15p/min. If you are on wifi at your home you pay virtually nothing to the operator and if you are a bulk user like 15 GB at Rs 1000 you pay 3-4p per minute or even zero paise at unlimited plans.

-- Telcos have invested billions of dollars in infrastructure. Building a tower costs 1 crore, maintainance and servicing Rs 1 lakh per month. Laying down cables, servers, equipments, license fees, taxes , employees etc cost huge amount of money. Normally cost of telcos is around 60% of total revenues which is mostly fixed.

-- Let me explain it to you mathematically.

Let a telco earns Rs 100 Cr per month

Voice revenues = 80% i.e 80 Crore

VAS & Data revenue = 20% i.e 20 Crore

Cost = 60% i.e = 60 Cr

Total profit before taxes= 100-60 = 40 Cr

Now if we start using voip at pack rates the increase in data revenues will hardly be Rs 10 Cr on an optimistic side. But we will lose the Rs 80 Cr original voice revs. So net loss 80-10 = 70 Cr.

cost remains same at Rs 60 Cr.

So now the new income = Rs 10 Cr from voip + 20 Cr from VAS and data = 30 Cr.

Profit = 30-60 = -30 Cr.

So for every 100 cr they are losing 30 Cr. Todays telcos earn 4000-5000 Crores just imagine the loss.

-- Telcos cannot bear this loss so they ll shut down and lakhs of people will get unemployed.

-- Dont compare it with rich nations as their the telcos earn 70% of their revenues from data usage.

Now you might say there are hardly few people using smart phones. The answer to this is 80-20 rule. Top 20% of the customers gives you 80% of the revenues. Your top customers use smartphones they are tech savvy so if you lose them you lose 80% of your revs.

The good news is you can still get voip for free if you are a bulk data user. If you are not a bulk user still no need to worry as telcos will give you voip rates a bit cheaper than normal call rates since they will not have to pay the interconnect charges which is 20p/min when you make calls to other networks.

Dont think about net neutrality our country has not matured to embrace net neutrality. Maybe by 2025 we will when 5G starts and 4G is everywhere.

This article is written by me using my experience and knowledge of telecom business. If you have any doubts please ask

 

[wewake]

but d data is data.. its our choice that hw we'll use it.. they can't restrict us upto browsing.. we are already paying for the data..

 

[sagar.patnaik]

but d data is data.. its our choice that hw we'll use it.. they can't restrict us upto browsing.. we are already paying for the data..

they are not restricting you in anyways actually they want you to use more and more data. But human being is greedy all they want is cheaper rates but they dont understand the money it costs to give you the service. no one sells at loss. If the company shuts down you will not even get the service

 

[Sarkar]

already two threads are running. How many do u want ?:dodgy

 

[sagar.patnaik]

already two threads are running. How many do u want ?:dodgy

Those were news threads, this article gives you my view point using real data. You wont find this on internet

 

[Sarkar]

Those were news threads, this article gives you my view point using real data. You wont find this on internet

Can u tell me one thing how does telecom companies make profit in other market like UK, US, china, korea where data price is also low on top of that chat,VOIP services are free ?

 

[sagar.patnaik]

Can u tell me one thing how does telecom companies make profit in other market like UK, US, china, korea where data price is also low on top of that chat,VOIP services are free ?

I hve given the answer in my article. They earn around 70% of the revenues from data. Voice revenues are hardly 20-30%

 

[sagar.patnaik]

No need to worry though telcos will come up with unlimited voip plans

 

[Sarkar]

I hve given the answer in my article. They earn around 70% of the revenues from data. Voice revenues are hardly 20-30%

If those operators are making profit mainly on data then airtel can also do that. So by promoting those VOIP service Airtel also can get 70 % revenue from data. Why is airtel not doing that ? :huh

 

[Sarkar]

No need to worry though telcos will come up with unlimited voip plans

Why don't u understand that they are charging us twice for same data ? one for browsing and the other for voip like services. Fully agree with @wewake

but d data is data.. its our choice that hw we'll use it.. they can't restrict us upto browsing.. we are already paying for the data.

As per Airtel, app players who are offering VoIP services are enjoying free ride on their network infrastructure which costs billions of dollars to set up and make revenue loss in terms of sms and calling but you are missing bigger picture here.This practice could have a far-reaching impact on consumers. The idea of restricting discounted plans for specialized use may sound harmless to start with, but picture this: Airtel starts a video streaming service and provides an incentive for users to buy a premium account with subsidies on the data plan limited to videos streaming(watch video at Rs 1 only). At the same time, it could also decide that streaming YouTube on its network will be more expensive. The provider can now control access to YouTube by making it slightly slower and access to its own service faster. Fair play? Most consumers would not think so.