October 11, 2005

Too Much Regulation Is Stifling Voice Calls On The Internet In India

By Prashanth Hebbar/TNN

   Just imagine the Indian government restricting the use of Hotmail in 1996 because it would terminally hurt the postal department. That the potential of a web-based mail was totally lost on policy makers is a welcome issue. But emails changed the way we do business or talk to loved ones. Another technology, which emerged some 5-6 years ago, is now threatening to disrupt the communication industry as we know it. Voice over Internet Protocol (VOIP), has put the communication industries in the US and Europe on notice. In countries like India and China, it has even prompted policy clamp-down.
   Internet Protocol (IP) is a technology that allows data being transmitted from point A to B anywhere on the globe using the most efficient route. This means, on a IP network, a given information is broken into small packets of data, all of which need not take the same route to reach the destination but are assembled into one packet once they reach there. Very unlike traditional networks which has only one or two back-up routes in case of a failure. This difference makes VOIP a disruptive technology that can send traditional telecom players packing.
   Consider eBay’s takeover of Skype, a VOIP (also called Internet Telephony) service which allows voice calls to be made from computer to a computer, or to a telephone/mobile and vice-versa. eBay plans to offer this service on its site from December this year, through which buyers and sellers can call each other and negotiate deals. There is no money spent on voice calls or time spent emailing each other. It's instant nirvana.
   Then there is Microsoft. It bo ught a Skype competitor, Teleo. Analysts believe the software maker will integrate Teleo into its operating system. Are you ready? Hold your breath. The government isn’t.
   Indian VOIP policy doesn’t allow individual users to exploit the offering. Only corporate users can deploy VOIP for international calls. Under Indian communication laws neither a VOIP call can be initiated—whether fixed or mobile, nor can a call be terminated on phones within the country. VOIP is allowed only on International Long Distance (ILD) networks. The situation here is no different than what prevailed during the infancy of internet in India. In the early nineties, Indian users had restricted access to the internet. Between 1992 and 1996, interent policy hurtled from one extreme to the other until it finally opened up. Contrast this with the fate of VOIP. Since around 1998, the first ISP Policy did not permit VOIP.
   Next year, the New Telecom Policy only managed to promise a review and turned to TRAI for recommendations. In 2002, TRAI recommended that VOIP service by ISPs be opened up on for long distance services. However, domestic services were restricted. In January this year, TRAI recommended opening up of internet telephony without any restriction.
   But only if the service provider moves into a full version of the unified license regime that implies upfront entry fee of Rs. 107 crores! “Contrast this with the recommendations on spectrum just two months later wherein no entry fee was recommended for the 3G spectrum, presumably so that the cost to the subscriber does not go out of hand. By the same logic, it would be welcome if the residual entry fee of ‘Rs. 236 crores’ be refunded or adjusted, while offering unbridled choice to the customers,” says Maheshwari. In effect, the policy has effectively done allowed enterprises to use VOIP which brings down the cost of connection. But it ignored the common man who still uses traditional networks and pays high tarrifs. “While a business tycoon in Mumbai may call his counterpart at Manhattan for 3 cents per minute (using the Internet Telephony, of course) a taxi driver in the same city has to shell out 6 cents per minute to call his family residing in a different state within India,” says Deepak Maheshwari, secretary of ISPAI (Internet Service Providers Association of India).
   VOIP for Indian enterprises is old hat. Every corporate house worth its salt routes its voice traffic to overseas destinations on its data lines. In fact, Cisco’s Ranganath Salagame is betting on a big uptake in VOIP applications in India. Cisco’s global business which is now spurting on the back of it’s VOIP-enabled equipment sales elsewhere in the world is an indication of the things to come. “Most developed countries and south Asian countries have reached a saturation point in te-rms of our foundation products like hubs and switches. What we are excited about is our product line with technologies such as VOIP telephones and communication equipment for businesses and homes,” says Salagame.
   Whatever the government thinks, VOIP is already being used by most Indians to chat on Yahoo, and now Google Talk.
   With the proliferation of broadband, VOIP calls from home or an internet parlour is growing.
   The question is how long the restrictive policy can hold against the technology current. Will the government clamp down on Yahoo and Google Talk? Will eBay India blank out Skype service for Indian us-ers and will Microsoft eventually ship its next generation operating system with Teleo disabled on it?

1 comment:

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