Instant messaging and VoIP company Nimbuzz wants to become a platform for ISP’s and telcos who have the license to make VoIP calls that terminate in India, the company’s CEO Vikas Saxena told MediaNama. Nimbuzz, in which South African media conglomerate Naspers has a minority stake, launched an international calling service HelloIP with Spectranet. The backend for HelloIP is powered by Nimbuzz.
Why Spectranet? Why Not Launch Services Themselves?
Nimbuzz already has a VoIP service called NimbuzzOut that is targeted at the international market, however Saxena says that it cannot work in India, legally, because without a license, calls originating from India cannot be terminated on mobiles or landlines anywhere in the world. This necessitated a partnership with Spectranet, which has an ISP license. This is contrary to what we believed, that restrictions apply only to termination of calls on landline or mobile networks within India. There were talks of Nimbuzz going for unified license themself to launch such a service, but instead they have opted to power the service for companies that already have such a license such as Spectranet, which got an ISP and VoIP license in 2008.
This also indicates that services like Skype are technically illegal in India when they allow calls to landline and mobile networks. “Skype did not care much about regulation in India or the Middle East till now, but now that they are part of Microsoft they will need to take it more seriously,” he says. Note that PC to PC, or IP to IP telephony, the kind also provided by Viber, is legal in India.
Saxena said that the calling service would have been very easy to launch if not for the licensing system needed, “This is one of the reasons why we don’t see many companies openly competing in this field in India. We don’t need to go for an ISP license, why spend money when others have already on the license. We are a platform and we make money when others make money. Nimbuzz can be a catalogue for telcos that are offering this (Internet Telephony) service in the future. If some other ISP comes up with even cheaper rates than Spectranet, customers can use that.”
Under the new telecom policy that was launched last year, a new unified licence was introduced which allows companies to offer voice telephony (VoIP) services by paying an entry fee of Rs 15 crore. Apart from Spectranet, Reliance Jio recently got license for VoIP services.
When the company initially launched their older NimbuzzOut service, their target audience was Indian expatriates in various parts of the world, however the market has changed now. HelloIP however is targeted specifically for callers from India and the company believes this market is worth $1.5 billion. Spectranet will be in charge of distributing the physical calling cards across India. Nimbuzz opted to go with Spectranet as they wanted to work with like minded companies and disrupt the market.
With HelloIP Nimbuzz is also targeting the enterprise segment which did not have many options in this regard in India; they had to go through whoever was selling them or their default telco provider, but now they have an option. Nimbuzz currently has 25m active users in India and 50m outside, bulk of it is from Arabic speaking world which adds up to 40m.
With Spectranet’s offering, Nimbuzz users will be able to call phones in US, Canada, UK (landline) and a few other European countries at a rate of 1 paisa per second, You’ll need to pay a higher tariff of 7 paisa per second to call mobile phones in UK, Australia, New Zealand and a few European countries. According to Nimbuzz such a rate difference exists in these countries as opposed to the US, because the companies who provide landlines don’t always have mobile offerings.
The offer from Nimbuzz is much lower than those offered by telcos (Rs7-20 per minute), but on par with the rates charged by VoIP providers globally. However, as pointed out earlier most of them do not have license to offer this service in India. Many telcos have recently raised international calling rates, which actually helps create a market for the likes of Nimbuzz.