BANGALORE: The legalizing or opening of Internet Telephony in India from April 1st 2002, marked the beginning of increase in communication between India and the outside world. Not far from privatizing the International Long Distance service, the Indian government allowed ISPs to offer Internet Telephony either PC to PC or PC to phone between India and the other countries. IDC expects the IP telephony market to grow at a CAGR of 119 per cent to touch Rs 13,000 crore by 2005.

Although the market has shown a great deal of interest only a couple of licenses has been awarded. Satyam Infoway has started offering the service on a trial basis in some cyber cafes across the country. Whether the market matures to exploit the opportunity with sheer number of users increasing is yet to be seen. However this has opened gates for application service providers such as www.dialpad.com, www.mediaring.com, www.net2phone.com, www.go2call.com, www.pc2call.com to eye the Indian market.

Preliminary reports confirm some of the application service providers mulling or in final stages of signing partnerships with ISPs in India. Reports reveal that while Indian ISP Caltiger has tied up with Net2Phone, Net4India has tied up with Delta 3, and IceNet has tied up with MediaRing.

While the calls charged by these service providers is pegged at anywhere between 3.9 cents to 5 cents per minute for a call from India to the US, Sify has announced a price tag of Rs 7 per minute. The average charge by other ISPs is also expected to be around Rs 8 per minute to the US.

"Our retail rate today for calls to India from any PC outside India is 49 cents. However, the government does not allow PC-to-phone calls to complete intra-country. In general, our PC-to-phone rates are extremely discounted from PSTN. The final rate is determined by the ISP," Net2Phone’s Corporate Communications, VP, Sarah Hofstetter.