INTERNET TELEPHONY: Freedom of Speech

Enterprises have long been allowed to use managed voice-over-IP (VoIP)
networks within closed user groups (CUGs), and there has been no restriction on
licensed voice service providers using IP as an underlying technology to offer
services. So what does the recently announced DoT guidelines for setting up
Internet telephony services imply? Simply put, it means that service providers
(ISP license holders) can now offer voice services over the public Internet–something
that was illegal earlier.

The new guidelines obviously have positive repercussions for both the ISPs
and the enterprises. ISPs will benefit from the fact that the entire value
proposition of the services they offer will change with the legalization of
Internet telephony. They can look forward to new revenue-generating streams.
They can also benefit from the fact that new applications, especially cheap
domestic and international voice, will result in users spending more time on the
Net, and hence consume more bandwidth. Besides, services like VPN can be made
more efficient and cost-effective by voice enabling them. "For ISPs, this
means that they now have the permission to offer one more application and
service to their subscribers, targeting retail and enterprises.

The new regulation is not likely to create much impact on the existing voice
market in India, especially in relation to the business of the existing fixed
service providers. Most of the basic service providers as well as international
long distance licensees who also hold ISP licenses, are likely to use the public
Internet to offer a cheaper voice alternative and may bundle the service with
the existing PSTN voice. How much impact this can create is not clear now, given
the country’s abysmally low PC penetration, since usage of the PC is central
to DoT guidelines. "I think PC penetration is an important factor, and so
Internet telephony will not have much impact on the consumer market,’’ Ajit
Thatte, V-P, marketing, Tata Telecom, says. Also, it is a fact that wherever
Internet telephony has been allowed worldwide, it has created a new market for
itself. People who are most likely to use Internet telephony are those who have
little regard for quality or those who are going to be the first-time users of
international voice services.

As far as enterprises are concerned, there would not be much change for those
who could afford to invest in their own networks as they have been allowed VoIP
over CUG all along. Even prior to the announcement of this policy, they could
set up a single network to offer voice and data services as long as the network
and its services were restricted to CUGs. However, Yadav points out, small
enterprises who could not afford to set up their own networks, can now avail
this service over a service provider’s IP network, and thus benefit greatly.
Manish Sablok, national marketing manager, Tata Telecom, has another point to
make: "Now that the government has allowed Internet telephony, enterprises
will be more receptive to the technology. Opening up will give us an opportunity
to demonstrate the benefits of IP."

Ravi Shekhar Pandey