Patrice Riemens on Fri, 15 Aug 1997 12:28:50 +0200 (MET DST)

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<nettime> telco-politics in India

Hi Folks,

I'm cross-posting this piece from G-N-D because it gives some background
on the almost surealistic situation with regard to external
(tele)communication flows in India' 50est year of independence. You have
to realise that the state-owned VSNL, which has absolute monopoly in
running India's external telco-links (ie telephone/fax, telex, and what
remains of the telegraph system) is also the almost sole provider of
Internet access to the non-institutionnal sector.  This was one the main
subject we discussed in a telephonic interview with Goan Internet wizzard
Boogie Viegas in Kassel (documentaX, HybridWorkSpace, the Bandwidth
programme) (

> goa-net-digest             Tuesday, 17 June 1997       Volume 01 : Number 600
> ----------------------------------------------------------------------
> From: Marlon E Menezes <>
> Date: Mon, 16 Jun 1997 17:09:23 -0500 (CDT)
> Subject: report slams monopolistic VSNL
> From: jit <>
> Newsgroups: soc.culture.indian
> Subject: VSNL's lies on international calling rate
> Date: Mon, 16 Jun 1997 12:50:23 -0700
>                                   [Image]
>                             [The Economic Times]
>                            SATURDAY 14 JUNE 1997
>                                   [Opinion]
>   VSNL's lies
>   Editorial writers have had to wrestle with information and
>   reports inadvertently or consciously biased by its source.
>   The Internet has changed matters as it enables a relatively
>   low-cost cross-referencing. On the issue of international
>   accounting and settlements, most reporters would have few
>   options besides contacting the VSNL for information on the
>   topic. Hence, the myth that VSNL's squabbles with the FCC
>   of the US are about conflicting national perspectives on
>   policy.
>   One has to only scan the web-site of a neutral body like
>   International Telecommunications Union
>   ( as well as its annual World
>   Telecommun-ications Development Report (WTDR) to conclude
>   that FCC's insistence on lower accounting rates is an
>   inevitable consequence of falling prices driven downwards
>   by deregulation. VSNL's astronomical wholesale rates or
>   accounting prices are unsustainable since incoming traffic
>   from the US far exceeds the reverse flows. According to
>   figures published by WTDR,the surplus of USA's outgoing
>   over incoming traffic to the world increased from 52
>   million minutes in 1975 to 8.6 billion minutes by 1995.
>   There has been a concomitant fall in its accounting rate,
>   which fell 43 per cent between 1990 and '95. Increasingly,
>   the disparity in tariffs has encouraged arbitrage, all
>   benefiting US carriers.
>   Similar imbalances are inevitable in other countries home
>   to competitive telecommunications such as Britain and New
>   Zealand. The ITU web-site suggests that these countries
>   will join the US to create zones where they agree to lower
>   tariffs denying others the same benefit.
>   It should, therefore, come as no surprise that telephone
>   tariffs are the single most issue engaging the attention of
>   the world telecommunications community. Besides the FCC,
>   the ITU and OECD have prepared discussion papers suggesting
>   alternative methods of pricing agreed between vendors
>   independent of bilateral agreements between nations.
>   VSNL has, at long last, conceded a marginal ten per cent
>   reduction in the tariff rates having realised that its
>   traffic will only increase.
>   This is doubtful since the costs of competitors in
>   deregulated markets, such as the US and Britain, are less
>   than a fourth and they will probably match the price cuts.
>   Moreover, the domestic exchanges in metropolitan areas are
>   already working to capacity as is indicated by chronic busy
>   tone during peak hours.
>   VSNL has sought to assiduously obfuscate the substantive
>   issue that its monopoly over international communication
>   till 2004 is just not defensible in the current global
>   technological and regulatory context. India will not be
>   able to lower its tariff to the desired extent unless
>   competition drives down the costs as well and improves the
>   quality.
>   Moreover, the data circuits of the Internet have already
>   been used to route voice traffic. As the quality of
>   telephone calls over the Internet improves, so will their
>   frequency. In the future, low-orbit satellite communication
>   will facilitate anytime-anywhere personal telephones that
>   can by-pass national carriers. VSNL, in other words, will
>   be left defending a fort nobody wants.
>   At the least, the Government should permit the entry of
>   independent Internet Service Providers without the rider
>   that their traffic be routed through VSNL's network.
>   Technically, the government will not breach its promise to
>   maintain VSNL's monopoly in international communication
>   till 2004 if it allowed private V-SAT companies to route
>   Internet traffic through their networks. Worldwide, telecom
>   infrastructure and services are viewed as distinct
>   businesses; the latter is generally governed by more
>   liberal policies.
>   As the volumes of electronic commerce grow, the parties
>   interested in very low costs of trade over information
>   highways will queer the pitch for publicly owned telephone
>   companies. Potential investors in VSNL are realistic enough
>   to realise that its long-term viability is at stake if it
>   is not exposed to global competition now. They can well be
>   taken into confidence before the final green signal to
>   allow entry of private companies in international
>   communication.
> __
> Marlon Menezes                    (217)244-6852,333-6466(w)
> 1304 W Green St.                  (217) 328-4353 (h)
> Urbana, Il. 61801                  e-mail:
> U. Of Illinois, Materials Science
> ------------------------------
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