Now, govt to take a call on creating BSNL Videsh

The government is looking at creating an international arm of Bharat Sanchar Nigam Ltd (BSNL) – BSNL Videsh – to aggregate India bound internationals calls overseas and then route them to the country.

To aggregate calls overseas before routing them to India, an operator has to create points of presence (PoPs) in that country for which a licence has to be taken.

PoPs are switches by which the calls are aggregated. By creating the PoPs, especially in countries like the US and UK BSNL will be able to get much better rates from international carriers on the basis of the volumes. The benefit could be passed on to the customers calling to India in the form of lower tariffs. Sources said that since BSNL has an international long distance licence (ILD) in India, creating PoPs overseas makes business sense for it.

BSNL will also be able to launch India calling cards overseas as is being done currently by its rivals like Bharti Airtel and Reliance Communications. At present, overseas calls of BSNL are aggregated by private operators like Reliance Communications and Bharti Airtel, both of whom have PoPs in the US and UK. Industry sources said that once BSNL sets up its own PoPs overseas it will dent the business of rival operators like Reliance and Bharti as at present, they are able to get better rates from foreign carriers on the basis of BSNL?s traffic.

Once this traffic goes away from them their volumes will go down making the market tougher for them.

Sources said that for creating BSNL Videsh the government will have to create an altogether separate infrastructure. The company would face tough time in acquiring licences in the US and UK as the regulator in these countries is very tough with the incumbent operators of other countries compared to the private operators. The total international incoming market is of 11 billion units on a yearly basis translating into Rs 2,500 crore.

According to industry estimates, Reliance Communications has the largest market share in this segment with near about 40% share followed by the Tatas-controlled Videsh Sanchar Nigam Ltd and Bharti Airtel having about 30-33% market share each.