The Hindu Business Line : Net advantage

The Telecom Regulatory Authority of India’s (TRAI) proposal to allow unrestricted Internet telephony augurs well for both consumers and the telecom industry. Currently the Internet can be used only to make calls between two computer users within the country. In the new proposal, people with normal mobile and fixed line phones can get their calls routed through the Internet at a much lower price than they do today. There are at least two reasons why the costs will dro p: One, an Internet Service Provider does not need to own a large network of optical fibre cable or cellular towers across the country, nor does it have to pay any carriage charges for Internet-based calls, normally associated with the traditional long distance telephone service. Two, enough service providers will sprout countrywide and compete hard enough with one another to send tariffs crashing.

The change is called for because domestic long distance calling rates have hit a plateau in recent months as there is not enough competition among service providers to drive the price down. 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 business segment. There are no more than four operators offering STD services to the common population at the national level. Allowing unrestricted Internet telephony could bring as many as 50 operators into the fray and that will alter the market dynamics immeasurably, slashing long distance call tariffs to a fraction of what they are today. Although given the nature of the medium and its technical constraints, the quality of the voice service may not be as good as one gets on the conventional wired lines, Internet telephony should win a large clientele.

Leading telecom markets like Europe and the US 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 owning traditional cellular and fixed line networks 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 1,650 crore before they can start offering voice calls. Rather than seek to block this change, the incumbent operators must enthusiastically embrace this medium for it will bring them a new set of consumers and a new stream of revenue and not just for the ISPs. 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. It has taken more than four years for 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.

Related Stories:
TRAI pitches for domestic phone calls via Net
TRAI move to open up internet telephony within India
DoT moves to bring Net telephony under scrutiny

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