Ringo App, low cost domestic and international calling app has received a major setback in just couple of days after their domestic launch. Some of the Indian Telecom Operators have allegedly blocked the app on their networks. Ringo has now suspended their domestic call service until the issue with Operators is resolved.
Ringo, currently available in over 103 countries, has been quite popular for their international calling. Last week, they launched local calling on the app which offered one-fifth of the voice calling rates that telecom operators in India offer. While normal calls through Telecom operators hover between Rs. 1 to Rs. 1.20 per minute, Ringo was offering the same at just 19 paise per minute.
According to the company, the app offers 25 percent cheaper calls than even Skype and Viber.
The biggest advantage is that the recipient of call does not need to have app installed. In short, Ringo users could call anyone, anytime at fraction of the cost.
Obviously, given the price difference, this app has not gone down well with Telcos, especially because Ringo makes bulk purchase of minutes from same operators and offers voice calling to their users at fraction of the cost.
In an official Blog post, Bhavin Thurakia, Founder and CEO of Ringo said, “The service is a fully legal, compliant service, and follows all aspects of the DoT and TRAI regulations. However in spite of being fully compliant with the law, the service allegedly seems to have been blocked as of half an hour ago (30th November) without any notice to our service providers. This is the information we have just received from our service provider.”
The blog post specifically mentioned that International calls continue to work without any issues.
Bhavin mentioned that they are currently seeking clarity from Telcos in regards to this block. He added that if the resolution of this problem takes longer than 2-3 days, they will immediately refund any unutilized amounts users have paid.
Our View – Tough Road Ahead for Ringo for Domestic Calling
Ringo app directly competes with Telecom operators who have poured billions of dollars of investment in getting spectrum and building their network. They already operate on wafer thin margins. And if someone like Ringo comes and threatens to take away good portion of their voice calling business, they will not take it lightly.
Even if Ringo app is fully legal and compliant service, it will be difficult for them to operate going forward. Telco’s will probably just jack up the prices of bulk minutes (or worse not sell any airtime to them at all) which Ringo buys from them.
In our view, It’s going to be a tough ahead for Ringo to resume their domestic service
