INDIA: Economic Panel Recommends Allowing VoIP

[Ahmed Omair <ao@akunet.org>]

URL : http://asia.internet.com/isp/2001/02/0209-vsnl.html

Economic Panel Recommends Allowing VOIP
By Uday Lal Pai 
India Correspondent, asia.internet.com

[February 9] The Prime Minister's Economic Advisory Council has
recommended that the government allow Voice Over Internet Protocol to
reduce the cost of telephone calls.

The Indian government has banned IP telephony in the country because
the Department of Telecom felt that if allowed, VoIP could seriously
threaten revenues of Videsh Sanchar Nigam Ltd (VSNL), India's monopoly
national telecommunications provider. 

VSNL is believed to have taken a stand against Internet telephony in
response to the potential threat of its customers using the Internet
to make cheaper domestic and international phone calls. Over 90
percent of VSNL's revenues currently come from international voice
traffic.

However, when contacted, VSNL sources said that VSNL believes that
Internet telephony can be introduced after a recommendation by the
International Telecommunications Union (ITU) is implemented, which
provides for cost-sharing of Internet circuits to the U.S. 

"VSNL has always been insisting on the reduction of tariff, which will
give a boost to the international traffic from India. The last quarter
traffic of VSNL has grown by over 30 percent solely because of the
reduction of tariff and settlement rates," said VSNL sources.

Government sources said the DOT has set up a special internal group
headed by the deputy director general (regulation) for recommending a
strategy to achieve this objective. "The recommendations will be
placed before the Telecom Commission soon," an official told this
correspondent.

However, Bell Labs' president Dr. Arun Netravali had some words of
caution too for those who are eagerly waiting for legalization of
Internet telephony in India. 

He pointed out that VOIP has not really taken off in the last decade
and its large-scale adoption was faced with numerous hurdles. 

"The bigger story about the advantage of VOIP is becoming smaller and
smaller. It is not the just voice quality that is the issue. At this
point there are significant hurdles like the lack of software for
standard routers and the cost differential between VOIP and circuit
switched telephony," Netravali said.