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IN WHAT may be the first step towards full-fledged internet telephony in India, telecom regulator Trai on Monday launched a consultation process to put guidelines in place for opening up of the sector. At present, Indian regulations do not permit Internet Service Providers (ISPs) to offer internet telephony to terminate on landlines and mobiles within the country. However, all telecom service providers including Bharti Airtel and Vodafone Essar have been permitted to offer internet telephony services since January, 2006. So far, only state-owned MTNL, which offers mobile services in Delhi and Mumbai, has launched internet telephony services within India.
ISPs have been demanding that the government open up internet telephony so that they can compete with telcos on long-distance services front. “Telecom companies have failed to launch internet telephony as they fear that that this would eat into their revenues. For instance, if ISPs are allowed to launch these services, we can offers ISD at Re 1/minute, STD at less than 50 paise/minute and local calls between 10-15 paise/minute. This is a fraction of the cost offered by the large telcos for similar services,” explained an official from a leading ISP.
Telecom regulator Trai too has said that the opening up of the VoIP sector can lead to cheaper tariffs. “Technologies that use the Internet to deliver voice communications have the potential to reduce costs, support innovation, and improve access to communications services within developing countries and around the world resulting in reduced digital divide. Use of internet telephony for calling landlines and mobiles abroad has already generated competition in the International Long Distance (ILD) sector and reduced tariffs. Opening of the Internet telephony can impact National Long Distance (NLD) sector also in the same way,” the regulator said in its consultation process.

The regulator has sought industry’s comments on several issues that will have to be addressed before internet telephony is opened up completely and these include examination of certain regulatory issues like interconnection, numbering, lawful interception, emergency number dialing, Quality of Service etc. Trai data reveals that Indians used 340.96 million minutes of international internet telephony in 2006-07, which shows a growth of more than 50% on year-to-year basis. “Internet telephony service is likely to become more popular in near future as end users are now allowed to make Internet telephony calls without requiring a Personal Computer (PC) with the help of standard adapters,” Trai added. The Internet Service Providers Association of India, the body representing all ISPs, however, fears that despite Trai’s plans to open up this segment, the ‘lobbying power of large telcos would ensure that ISPs are kept out of this sector.