Good call on Internet Telephony

The Telecom Regulatory Authority of India’s proposal to allow unrestricted Internet telephony augurs well for both the consumers and the telecom industry. Currently the Internet can be used only to make calls between two computer users within the country. The new proposal from the regulator will allow consumers to make calls through the Internet using normal mobile and fixed line phones. This recommendation has come at a time when domestic long distance calling rates seems to have hit a plateau. And as a corollary the minutes of STD usage per month is not picking up in proportion to the average increase in local call minutes. The basic problem in the domestic long distance telephony segment is that there is not enough competition to drive the market dynamics. Though there are more than 10 companies with licences to offer long distance telephone services, most of them are focused on services meant for the lucrative enterprise segment. There are not more than 4 operators offering STD services to the common population at a pan Indian level. Allowing unrestricted Internet telephony could take the number of operators to more than 50 as the technology allows the local Internet Service Provider to become an STD operator by routing calls, both local and long distance, through the world wide web. Compared to traditional long distance telephone services, the cost of offering Internet telephony is marginal as it does not require an ISP to own large networks of optic fibre cable or a cellular network spread across the country. It also works out cheaper because ISPs do not have to pay any carriage charges for Internet based calls, normally associated with the traditional long distance telephone service. Net telephony coupled with the regulator’s new proposal to allow consumers to choose their long distance operator through calling cards will make this segment more competitive. The net result of all this is that consumers will be able to get a choice of operators while making a long distance call at a fraction of the tariffs that exists today. The industry too benefits as it will bring a new stream of revenue for both the ISPs and the existing telecom operators. The Internet Service Providers Association of India reckons that Net telephony will give a fillip to the broadband uptake in the country as the ability to make telephone calls over the Internet would make it a more compelling reason for the consumer to take a connection. Leading telecom markets like Europe and the USA have already adopted this technology. Globally about 18 per cent of voice calls are now being routed through the Internet. Fearing that this trend may be replicated in India too, incumbent players have raised objections to the TRAI’s recommendations. They have demanded that the level playing field should be maintained by asking the ISPs to pay an entry fee of Rs 1650 crore before they can start offering voice calls. The same telecom operators were allowed to launch Net telephony by the Government two years back but no one has offered the benefits of this technology to the consumers. Now when the ISPs are being allowed to offer this service, the existing operators are playing the level playing field card worried over losing their market share. But any such levy on the ISPs would kill Net telephony even before it has started. In fact internet telephony, if introduced, will also benefit the incumbent telecom players in the form of additional revenue by leasing out capacity to the ISPs. Plus the telcos can themselves start offering Net telephony services and compete with ISPs in the market place rather than at the regulatory level. In any case the interests of the consumers outweigh the interest of any particular segment of the industry. It has taken more than 4 years for the TRAI to come out with this consumer friendly recommendation. The Government should stay clear of any pressure from the lobby groups and allow unrestricted Net telephony at the earliest.