Net telephony freed, call rates set to plunge further

NEW DELHI: Consumers will soon be able to make STD calls as cheap as 10-40 paise and possibly make free local calls from their computers. Telecom regulator TRAI on Monday removed all curbs on internet telephony in the country, allowing internet service providers (ISPs) to terminate internet telephony calls on phones, including mobiles.

Till date, a call from a computer could legally be made only to another computer within the country, and not to a phone. (The policy regime, though, allowed domestic users to make international calls to a phone from their computer.)

For consumers, this means they can make calls from PCs to fixedline and mobile phones in India. They can also make a call to personal computers from their handsets.

The move ensures that rural India will be the biggest beneficiary as users would be able to make ultra-cheap calls from PCOs using this technology. Broadband growth is also likely to get a boost. Also, WiMax, a wireless broadband technology getting ready for launch in India, is a potential gainer from the move. Challenges remain in the form of low PC penetration—3.6%—in the country. The move is also aimed at clamping down on the grey market in the country where players have been offering such services illegally.

At present, voice calls over the internet can be made only between two computers and not between a computer and a mobile/fixedline phone. Net telephony allows ISPs to challenge the dominance of telcos in the domestic communication market. Most telcos are ISPs as well.

But net telephony can also hit the revenues that telcos such as Bharti Airtel, Vodafone Essar and others earn from long distance services. This has resulted in telecom operators already protesting TRAI’s move on the grounds that it would destroy their business viability. Telcos also said that they would lobby with the government against accepting TRAI’s proposals to open up the sector.

For ISPs, internet telephony will open up major new revenue channels. Additionally, cheap internet telephony can also lower the operating expenditure of domestic call centres and BPOs.

Net telephony can also bring in new revenue streams to many national long distance (NLD) licence holders and act as an catalyst for them to extend their fibre networks beyond metros and tier-I cities.

Source : Economics Times