Calling cards market is calling - Airtel says 'Wait' !

Bharti Airtel has put off its plan to kick off a series of tariff wars abroad with the launch of its virtual calling in global markets on account of the complexities and excess demand that the company faced with the launch of this service in the US. Bharti Airtel had launched calling cards in the US in 2006 and said this service would soon be extended to the top 10 countries in terms of the NRI population, which include Canada, the UK, Singapore, Malaysia, Saudi Arabia and other Gulf countries. As per industry estimates, the outgoing traffic from the US to India is about 450 million minutes per month, of which about 200 million minutes are through calling cards. Besides, close to 80% of the incoming calls to India are made from the top 10 NRI countries.

But now, the company has decided to defer the global expansion of this until the glitches faced in the US are solved. In the US, the demand was far higher than the capacity that was installed. Airtel therefore had to upgrade IN platform and augment the capacity. They also had some problems with the subscription process with regard to how customers signed up for this service. Airtel expect to address all issues in the US by August-end. The excess demand for its calling cards in the US—so much so that the back-end could not handle the load—was because the tariffs were reportedly 40% cheaper than the prevailing tariffs there. For instance, its offering of 7.9 cents per minute in the US resulted in AT&T slashing the tariffs for its India 60 Plus calling card from $14.99 per month (around 25 cents a minute) to $11.99 per month (around 20 cents a minute) for 60 minutes talktime to India. “

Airtel expects to be present in the other markets by March 2008 and is currently working on regulatory clearances and network agreements with other long distance carriers in these markets. According to Airtel spokesperson, another reason for the temporary delay was that Bharti did not want to make any compromises on the quality of service. “We have learnt from the US experience. As we take the Bharti Airtel brand outside India, the launch of this service offers us the best chance to make the first impression. We are cautious and we have to do it right as this also marks the foray of the Bharti brand. Our long-term positioning is therefore important as any of the Bharti Group companies can enter these markets in the future,” . After the launch of calling cards, Bharti is planning to target Indian corporates and other companies abroad that employ a large numbers of Indians. It plans to offer them a two-way business model—connectivity to and from India. Bharti’s logic for venturing into this segment in global markets stems from the popularity that calling cards enjoy in these countries.

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