Net Telephony Freed, Long Distance Rates To Go Down

By Pallavi S

  • 20 Aug 2008








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Call it India’s Communications Revolution V 2.0. After the government came out with norms for the launch of next generation phone services through 3G, now it is also on the verge of fully ushering in internet telephony in the country. The telecom regulator has removed restrictions on net telephony which allows internet service providers (ISPs) to terminate voice calls from the net on the phone.

Put simply it makes voice calls interoperable between mobile handset (VOIP- voice internet protocol– enabled) and a personal computer (PC). To be fair, some firms have already been offering such services in India, through the illegal route. It basically stumps the illegal operators.

Consumers would be able to make calls from PCs to fixedline and mobile phones in India. They can also make a call to personal computers from their handsets.

Till date, a call from a computer could legally be made only to another computer within the country, and not to a phone. However, one could make international calls to a phone from their computer.


The foremost impact will come from drop in prices. The average cost of a call today is around Re 1 for a STD call i.e., long distance call within India as also for a local call within a city for one minute. It is expected that call charges may drop by atleast 50 percent once the ISPs start full fledged internet telephony service. Some experts believe that local calls through PCs could virtually become free while STD charges could drop to 10-40 paise per minute. The charges for international long distance telephony will also fall.

On the one hand it opens new revenue sources for ISPs, it also allows heavy communication users such as BPOs to lower costs further. However, at the same time it could create a challenge for telcos, specially in the domestic communication market and can hit revenues of operators from long distance telecom services.

Not surprisingly then the association of GSM cellular operators have already started lobbying against the opening of the net telephony sector on the grounds that it would destroy their business viability and have asked the authorities to levy a license fee from ISPs like the telcos are charged for offering their services. But the teleocm regulator has dismissed these arguments. Interestingly, most telcos double up as ISPs as well. However they have not been too active in the field.

(Picture courtesy: Indranil, Via Picasa Web Album)

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