Bubble up or bubble burst?

More than 35 illegal operators were making thousands of dollars a week selling calling cards. PHOTO: STAR

Most members of the public previously had to face difficulties in communicating with relatives and loved ones outside the country. The rates for international calls through the state monopoly BTTB's (Bangladesh Telegraph and Telephone Board) gateway was one of the highest in the world. Such a scenario facilitated the illegal internet telephony operators to profit at their will from international phone cards of various prices starting from Tk 100 and going as high as Tk 500. More than 35 illegal operators were making thousands of dollars a week selling such cards.

But now with the legalisation, most internet service providers feel that international call rates would now fall by at least 65-70 percent, which would benefit international callers from Bangladesh the most.

The phone card companies have a different perspective; most of them are concerned about the fact that they would now have to obtain licences to legally be in the business.

"Since the government has not as yet specified their policy about the licence requirements, we fear that there might be some stringent rules and regulations to run this trade," observed marketing manager of a telephone card company.

With this apprehension comes the equally unnerving fact for the operators that they would heavily be taxed, as the government aims to fetch revenues to the tune of around $2 billion by giving VoIP the legal cover.

Some government agencies have recommended that the licence fees should be somewhere in the range of around $ 55,000 to 60,000 so as to weed incompetent VoIP service providers off the business. Operators feel that the government should also keep the economic condition of the country in mind and at least let some small firms survive in the process while setting the ceiling on the licence fees.

The question playing on the minds of general public and the international card phone buyers is whether such level of taxation would raise the prices of these cards or reduce the call times on the cards. According to a report, VoIP service minutes may leap to 600 billion from 0.325 billion in the Asia-Pacific region, generating $48 billion in revenues by 2006, which is up from $78 million in 1999.

As far as call times are concerned, previously duration of calls from varied from card to card due to the carriers that each operator use.

"The call times would more or less be the same and the price should more or less be on the current level," said Md. Abdul Baten, marketing manager of Imart. He reasoned his inference with the fact that with the legalisation, operators would now be able to use landlines, rather than mobile phones that they had to use previously. The cheapest call rate per minute on any mobile phone is Tk 2 and even then, the quality of each call is not up to the mark. But with the option of land phones, which the operators will now avail themselves of, the quality of the calls can be ensured and the call charges should be little low.

At the same time, mobile phones will also be in use as users with mobile-to-mobile option will be able to use the cards to make international calls.

"But still everything depends on the government's decision on the margin of license fees and security deposits that a operator would have to pay," said Baten.

So if the operators are in such a dilemma, who would actually gain from the legalisation of VoIP? IT entrepreneurs are quite optimistic that they would now be able to do better business since they believe that the government would set rules, which would strictly regulate certain operators. These IT entrepreneurs would finally gain 'the competitive edge' over the operators, which they have always dreamt of. IT entrepreneurs would now be able to set up authorised call centres and medical transcription and tele-medicine businesses.