Telcos in redial mode, bet on global calling cards again

MUMBAI: Telecom companies are bullish on global calling cards (GCCs) once again. After launching calling cards with a big bang in ‘04, telcos almost fell silent as mobile tariffs tumbled and users preferred making direct calls to using cards.

Operators are now offering never before international call rates through GCCs to ensure that customers are glued to calling cards once again.

At present, Bharti Airtel, Reliance Communications, Hutchison Essar, MTNL and Tata Indicom are offering ILD calling cards.

While Hutch rolled out call cards about two months back, Reliance slashed its ILD tariffs through GCC by up to 66% last week. Airtel had already done so earlier this month and is now offering the lowest ILD tariffs through GCCs. Industry experts see this spurt of activity on GCC front as a strategy to seed the calling cards market.

Calling cards, which come in various denominations, allow users to make ILD calls from any mobile, landline or pay phone.
“Following the integration of India with the global economy, large number of people are travelling abroad. As a result, the demand for making ILD calls is increasing. Operators are bringing down rates in GCCs as this will increase volumes in the short to medium term,” said an analyst.

The operators’ strategy is akin to that of handset pricing. “When handset prices were reduced, sales increased and the volume of traffic went up. Telcos are expecting a similar result in the calling cards market too,” said an industry observer.

Charges for calling the US and Canada are as low as Rs 3.25 per minute under some calling card options being offered by Airtel. On the other hand, calls from a direct Airtel connection would cost the user Rs 7.20 a minute.

Similarly, a call to the UK can be made for just Rs 3.50 per minute through Hutch calling cards against a normal tariff of Rs 8 per minute.

Service providers are able to offer lower tariffs in calling cards because they are assured of usage. “Unlike an ILD subscriber, who might not make any international call for months together, we are assured of usage when a customer buys a calling card. So we are able to offer discounted tariffs,” an official at a telco said.

Among operators, Airtel is offering the lowest ILD rates through its GCC. Calls to South East Asia can be made for Rs 3.25 per minute as against Rs 3.50 for Hutch and Rs 4.50 per minute for Reliance. Per minute rate for calling Gulf countries is Rs 8.25 under Airtel, Rs 8.50 for Reliance and Rs 10 for Tata Indicom.

A drawback with calling cards, however, is that a Hutch user can only use a Hutch calling card and not an Airtel or Reliance card. “As a result, users have to accept the rates being offered by their operator even if other telcos are charging less for the same destination. Operators must rectify this to ensure uniform calling card tariffs,” another analyst said.