News Details  :

AFTER making some questionable policy pronouncements on the issue of 3G spectrum auctioning, the Telecom Regulatory Authority of India (Trai) seems back on the right policy track. Its recommendation to the government to allow Internet telephony was long overdue, given how communications technology has evolved. If accepted, the recommendation will allow Internet service providers (ISPs) to offer telephone calls from a computer to any fixed or mobile phone in the country at substantially cheaper rates than consumers pay now for phone-to-phone services. The recommendation includes a suggestion to exempt ISPs from any additional entry free or licence charge. At the moment, policy only allows ISPs to offer PC-to-PC (voice) calls or PC-to-international calls. The new policy will enable many more consumers to make use of cheaper telephony over the Internet. It will also help cut roaming charges-a consumer can connect to the Net from anywhere and use the facility at standard charge. The other major beneficiaries of the government's approval of this recommendation will be BPO companies, who will be able to slash costs of making phone calls, some estimates suggest by almost 70%. That will be good for the competitiveness of India's BPO industry.

Not surprisingly, existing players in the mobile and fixed-line market are unhappy about this recommendation, as it will inevitably put downward pressure on their pricing, particularly on the high roaming charges strategy. Ironically enough, some of these players are also involved in the market as ISPs and they are allowed to operate Net telephony in India. They have, however, not done so to protect their profit margins. DoT must, therefore, immediately accept the recommendation to put an end to this anti-competitive practice, which harms millions of consumers. How will Internet telephony spread? One would need a PC to take advantage of the cheaper STD facilities; PC penetration in India is terribly low. Along with the PC, one also needs reliable power supply and a good broadband connection to use net telephony efficiently-not many places have that, either. So, it's too early to say that Net telephony will sound the death knell for mobile and fixed line providers. It will, however, sooner rather than later, force them to lower prices. That's good for consumers.