CARRIER SELECTION- what is it, what are the operators saying?


The latest buzz in the Indian Telecom industry already complaining against TRAI and DoT for the delay in rollout and licensing of 3G in India and has come under yet another regulatory order from the governing authority. The TRAI wants to introduce carrier selection in the India. So what is the fuss all about? Let us have a look.

Carrier Selection:

This enables a telephone subscriber to decide which operator it wants its call to be routed through when he/she is making an ISD/STD call. So say I am a Vodafone customer staying in Hyderabad and want to make a call to someone in Delhi. Unlike now where I have to stick to my present service provider (this case Vodafone) and it (my present service provider) decides how my call is routed and charges a specific amount for the call. In the carrier selection process I get to choose my own operator. This can be done by prefixing the code of the operator which I want my call routed through and whose network I’ll be using before the number to be dialed. My choice will primarily depend on two factors:

1.  Cost – operator providing cheaper call rates may be preferred

2.  Quality of Service – operator providing better QoS like voice clarity, low echo, and low latency and jitter.

So once the customer decides upon his option he’s free to use the particular operator.

This however should not be mistaken for MNP (Mobile Number Portability) where the customer uses the same number but has shifted to another operator. In Carrier selection I’ll be still under my service provider for normal call and value added services but for long distance calls I can choose the operator for carrying the voice calls. 

What’s TRAI’s Vision?

TRAI, yes the Telecom Regulatory Authority of India which has been bullying the telecom players for quite some time now. TRAI feels that the adoption of American system of carrier selection in India is largely going to help the subscribers. It also sees a general increase in competition thus pushing the prices further down. It will also spur further innovation in terms of better long distance communication and facilities (QoS). Thus TRAI believes the end user will be greatly benefitted.

What the operators have to say?

The operators believe that the present regulations being introduced by the TRAI is unfair for multiple reasons

1.  The present long and short distance call rates in India are already cheaper than most markets in the world. The call rate is generally in the range of 80 paise to Rs. 1.60. Out of this around 65 paise goes for the carriage, 30 paise is the termination charge (fixed by the operator) and rest is what goes to the operator. Therefore service providers think that they are already operating on a thin margin and there is minimal space for further reduction in call rates.

2.  Second, when the scheme of carrier selection was first introduced in early 2000 there were very few operators in the market. The scheme would have been feasible at that time encouraging competition and driving down call rates. Presently there are twelve Mobile Service providers operating in the market. Thus the service operators hold an opinion that they are already enough players to have good amount of competition and keep the prices as low as possible.

3.  Third, the cost required for setting up the Intelligent Networks for Carrier selection is huge. Rather than bringing down the cost, setting up these infrastructure and extra capital flow may lead to increased call rates. Moreover already the Telecom billing system is still maturing; there is no fool-proof system for correct billing. Due to this Mobile Telcos lose out on some revenues. Moreover increased burden in terms of setting up extra IN (intelligent networks) may tax heavily on the service providers.

4.  Finally, one more point to be taken note of is that most of the players which have a considerable customer base are already long distance players (barring Vodafone). And the competition has already driven the prices low.

The Mobile operating space is already very competitive courtesy a significant number of players in the market. Moreover they already are operating on thin cost margins. The Regulatory authority should therefore concentrate on 3G regulations and future innovations.

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