Airtel voip rates, confusion and my answer

[sagar.patnaik]

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

Explaining business and marketing conditions is so difficult. Just remember India is not US or UK Its like saying if US can be worlds second largest economy we can also be , yes we can but can we now no we need time. Data revenues are due to data usage, spectrum availability. Dont compare data usage by rich countries to India. Europe operators hve 15-20 MHz of 3G spectrum we hve given only 5 MHz. Broadband penetration in India is 1%. Will you pay the amount of money an European or American pays for data. Customer in India cries if call rates increase from 25p to 30p and Americans laugh when they hear our call rates.

 

[dino29]

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

Bro, ur article does not state facts. Can u please post actual info from reliable sources so as to show how much a mobile operator earns from data usage or voice. Also on what basis are you saying that in Foreign Countries data usage makes the mobile ops earn 70 to 80 percent of revenue.

For ur info, these mobile companies are earning huge profits since these different apps , sites etc. came. Their revenue is constantly rising, earlier their revenue was minute bcoz of persistent and max use of only voice calls. With the reach of internet constantly increasing and people using internet more and more on the phone for various things like net surfing which includes watching films, music, tv shows, using apps, facebook, twitter, official use etc these internet companies are gaining immense profit and in addition to that in the recent years they have raised the call and data rates continuosly. Voice calls will never diminish but if it will take the route of VOIP then what's the harm in it? Infact these mobile service providers will gain hugely out that as more people will use it and shift will happen from routine voice calling to various other forms over data.

Companies like airtel by charging for VOIP are doing nothing but trying to get more cream out of the options they have. Tomorrow if they say that data usage is separate from viewing movies on mobile, laptop. Will you allow that too? If this is allowed then mobile companies will create many Premium Cost categories under their data plans and charge separately for that. Name one country which does that. So don't be mislead by such companies, if you allow them then they will further loot you

 

[sagar.patnaik]

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.

Point is we jump in to conclusions without analysing. Its not like he murdered one guy so he is going to murder everyone. When I say countries like US can afford net neutrality coz its a mature data market we are not.

 

[dino29]

Explaining business and marketing conditions is so difficult. Just remember India is not US or UK Its like saying if US can be worlds second largest economy we can also be , yes we can but can we now no we need time. Data revenues are due to data usage, spectrum availability. Dont compare data usage by rich countries to India. Europe operators hve 15-20 MHz of 3G spectrum we hve given only 5 MHz. Broadband penetration in India is 1%. Will you pay the amount of money an European or American pays for data. Customer in India cries if call rates increase from 25p to 30p and Americans laugh when they hear our call rates.

U r self contradicting urself, if internet penetration is less in India then what's there to worry for the mobile operators. Their voice calling share will not go down and even if there is a shift it can easily be used to gain revenues as i have mentioned

 

[sagar.patnaik]

Bro, ur article does not state facts. Can u please post actual info from reliable sources so as to show how much a mobile operator earns from data usage or voice. Also on what basis are you saying that in Foreign Countries data usage makes the mobile ops earn 70 to 80 percent of revenue.

For ur info, these mobile companies are earning huge profits since these different apps , sites etc. came. Their revenue is constantly rising, earlier their revenue was minute bcoz of persistent and max use of only voice calls. With the reach of internet constantly increasing and people using internet more and more on the phone for various things like net surfing which includes watching films, music, tv shows, using apps, facebook, twitter, official use etc these internet companies are gaining immense profit and in addition to that in the recent years they have raised the call and data rates continuosly. Voice calls will never diminish but if it will take the route of VOIP then what's the harm in it? Infact these mobile service providers will gain hugely out that as more people will use it and shift will happen from routine voice calling to various other forms over data.

Companies like airtel by charging for VOIP are doing nothing but trying to get more cream out of the options they have. Tomorrow if they say that data usage is separate from viewing movies on mobile, laptop. Will you allow that too? If this is allowed then mobile companies will create many Premium Cost categories under their data plans and charge separately for that. Name one country which does that. So don't be mislead by such companies, if you allow them then they will further loot you

I am an alumni of Symbiosis Institute of Telecom Management and an ex Airtel employee. I know everything dude ask me I can give you revenue breakups. I worked in the revenue planning position. I dont want to disclose it openly on internet thats why I gave you a mathematical example.

 

[Sarkar]

U r self contradicting urself, if internet penetration is less in India then what's there to worry for the mobile operators. Their voice calling share will not go down and even if there is a shift it can easily be used to gain revenues as i have mentioned

Exactly :tup

 

[sagar.patnaik]

U r self contradicting urself, if internet penetration is less in India then what's there to worry for the mobile operators. Their voice calling share will not go down and even if there is a shift it can easily be used to gain revenues as i have mentioned

Sorry I meant broadband penetration not internet. And read my 80-20 rule

 

[Sarkar]

Point is we jump in to conclusions without analysing. Its not like he murdered one guy so he is going to murder everyone. When I say countries like US can afford net neutrality coz its a mature data market we are not.

See it like this. Will you agree if your petrol pump owner start charging you extra for petrol that you will burn if you are going to a hospital instead of your office? You just buy petrol. You don't pay different rates for petrol depending on where you are traveling. Another example (and one that was doing rounds on Twitter): How will you feel if your local vegetable seller jacks up prices for potatoes if you are going to use them to make French fries instead of aloo ka parantha?

This is what Airtel is doing. It is selling a service but then if you want to use that service for making voice calls using apps, you will have to pay extra.


Read more at: Hello Airtel, charging extra for internet calls is silly business : Talking Points, News - India Today

 

[sagar.patnaik]

See it like this. Will you agree if your petrol pump owner start charging you extra for petrol that you will burn if you are going to a hospital instead of your office? You just buy petrol. You don't pay different rates for petrol depending on where you are traveling. Another example (and one that was doing rounds on Twitter): How will you feel if your local vegetable seller jacks up prices for potatoes if you are going to use them to make French fries instead of aloo ka parantha?

This is what Airtel is doing. It is selling a service but then if you want to use that service for making voice calls using apps, you will have to pay extra.


Read more at: Hello Airtel, charging extra for internet calls is silly business : Talking Points, News - India Today

Funny thing is none of the guys writing the article has experience in telecom business. Petrol pumps charge you extra for extra premium oil. Vegetable purchased from a reliance fresh is expensive then local market. When you go to fruit market they dont give you all apples at same price. Apples are apples right. Its pathetiic on the authors side to draw a parallel in two different businesses. You cannot compare apples with oranges just for the comparison sake

 

[sagar.patnaik]

Go to Airtel's website or any other telco website which is listed on BSE. Check their financial reports you ll understand my point.

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