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Making phone calls through computers has been with us for a while. And many computer users know how to use Skype to connect with others. But, legally speaking, only international phone calls have been allowed on PCs using Internet telephony. More than six years after such calls were permitted, Internet service providers may be able to ring in calls within India. The department of telecom (DoT) had recently given the green light to Internet telephony within the country, but the guidelines are yet to be notified.



According to industry experts, the decline in the number of landline connections in the country might take a paradigm shift with the arrival of domestic Internet telephony. Low cost of a phone call would drive this market.



Voice over Internet protocol or VoIP services had a humble beginning and players were skeptical about the growth of the industry.



But in the past five years, after the Internet service providers and telcos started focusing on the VOIP, it has been maintaining a better pace.



In 2008, it generated Rs 45 crore as revenue. This may be miniscule compared with, say, Airtel's first quarter revenue of Rs 8,228 crore this year from mobile phone services, but the sector is expected to grow sharply once users connect domestically.



Internet telephony as is obvious from its name, uses the Internet route to send voice after converting them into digital signals rather than on the public switched telephone network. Unlike the traditional PC-to-PC calling, subscribers can now make calls to landlines connected to PCs and also to mobile phones.



Manufacturer of fixed and cordless phone company, Beetel has geared up to address this segment.



Sunil K Goyal, chief executive officer of Bharti Teletech said that Internet telephony market will witness competition once the broadband penetration increases in the country. "Looking at the potential of the market, we have launched handsets which support VoIP. This is an attractive feature, where a subscriber will be able to use the same handset for calling from his fixed landline and making Internet calls," Goyal said.



Both public sector telecom companies, Bharat Sanchar Nigam and Mahanagar Telephone Nigam have plugged into Internet telephony calls. Union minister for communications and IT, A Raja, had announced that phone call rates would be brought down to 25 paisa, which can only be achieved through Internet telephony. With mobile operators worried over the declining average revenue per user, the operators were not amused by the government's announcement. "The tariffs are already low, and we do not see rates coming down in the near future. Indian operators are offering rates, which are low compared with global tariffs," said Anil Jain, general manager, broadband at BSNL. What will differentiate providers would be the quality of service, rather than rates, he said.



However, Internet Service Providers Association is of the opinion that there is possibility that the landlines might pick up again. This could be a reality if operators start offering package deals for landlines and Internet telephony. DoT too is planning to make certain modifications in the definition of unified access services licence to allow VoIP as a part of the service offering for new licenses.



But will phone tariffs fall after VoIP goes through? The impact on mobile tariff is going to be dependent on the policies laid down by the government, says Neha Gupta, senior research analyst at Gartner, a telecom research firm. If the government charges a licence fee for connectivity to land phone network or mobile phone network, the tariffs of mobiles will not fall.