DoT has destroyed VoIP in India

NEW DELHI, INDIA: Internet telephony industry in India after years of suffocating strangulations looks to make a new strong beginning in the country.

The recent TRAI recommendations, which makes case for allowing Internet telephony on PSTN networks opens doors for industry, which analysts say will boost technological convergence, push competition and will drastically reduces voice tariffs in the country.

CIOL in a series of articles will be talking to leading analysts and market players in the industry to understand what the guidelines of mean for the growth of internet telephony in the country.

In the first part of series, CIOL, caught up with Jahangir Raina, CEO and director of research at iLocus (www.ilocus.com), a VoIP industry analyst group.

Raina has been tracking telecom industry specifically VoIP industry for close to two decades now. He has worked with several incumbents, regulatory bodies, and financial institutions worldwide on NGN studies.

Raina, in his analysis is very critical of the role DoT and the telecom ministry has played has played in the growth of VoIP in India.

"Government has basically killed VoIP and the overall NGN initiative in India. VoIP could have done much more if allowed fully five years back", says Raina.

"Assuming you are regulating a market driven segment of an economy, you would ideally protect the consumer interest by strengthening the competition in the segment. That is why resellers were free to price their ISD services in the UK while BT pricing was regulated. In India, however, DoT let its former government department (BSNL, which is essentially DoT) to drop prices before the competitors could come into the market." opines Raina.

"That took the life out of several competitive measures including network migration towards VoIP", he adds.

India had opened up to VoIP in April 2002. Previously, VoIP use in any form was banned in the country, though VoIP within closed user group such as an enterprise network was allowed

Post April 2002, DoT (Department of Telecommunications), on the recommendations of Telecom Regulatory Authority of India (TRAI), opened up the telecom sector to VoIP services in a limited manner.

The department set up guidelines for Internet telephony on 21st March, 2002, As per these guidelines, only Internet Service Providers (ISPs) were allowed to offer PC-to-phone for international long distance calls. ISPs were not required to pay any additional license fee, since PC-to-phone was defined as a value-added application service.

Lack of VoIP infrastructure

Though the department allowed ISPs to offer VoIP services, the regulations set out by DoT meant that the VoIP service would be availed by the ISP customers only from Net-connected PC to any other Net-connected PC (within or outside India); AND Net-connected PC to telephone (PC in India and phone abroad, not in India); AND IP phone to IP phone in India or anywhere in the world (provided on each end there was a dedicated IP connectivity typically found among enterprises only).

This strangulated approach to offer VoIP in India, feels Jahangir was extremely idiotic on the part of DoT as it scuttled the growth of VoIP in India.

"While in most countries migration towards VoIP resulted in price reductions, in India, VoIP is still struggling to find itself a role. That is particularly so because prices have already hit rock bottom"

The result, says Raina, is lack of VoIP infrastructure in the country.

"A big opportunity has been lost. The absence of VoIP infrastructure means absence of innovation around voice. By rendering VoIP impotent and a silent spectator, DoT has denied an Indian consumer a ubiquitous network/platform needed for new productive application"

Jahangir contends the damages have already been done and apart from losing entrepreneurship opportunities that could have been created had there been the underlying VoIP infrastructure in the country, the present TDM equipment deployed in tones will push for another 20 years of life in it.

"Keeping your telecom industry (the development of which holds a strong correlation with the overall economic development) backward by default is idiotic, " says Raina.

"Most new innovation in voice is coming from the web developers who leverage developer-friendly voice APIs of the underlying VoIP platforms and the VoIP network. Such infrastructure could have produced some cutting edge innovative stuff, which India so carnivorously craves for", adds Raina.

Raina isn't very confident about VoIP making any real value to telecom industry in the country.

"If voice in the future is going to be limited to just plain old calling then India does not need to worry. If we are talking applications (and enterprise users need them badly) then India is in bit of a trouble due to the VoIP delay." he adds

On the impact the announcement for the traditional incumbents like BSNL, who has been crying hoarse that allowing ISPs to offer will further erode the revenues earned by national long-distance license holders.

Raina points out that for BSNL it is a lucrative proposition anymore for the Indian consumer is very price sensitive and they already have low cost calling available.

"They are not going to spend in an ATA costing Rs. 3000 just to make a fixed call when they can make a mobile call off Rs 2000 Nokia set for lesser price per minute" adds the CEO.

Raina however points out BSNL and cell operators like Airtel stand to gain the most provided they can leverage the use of public internet for

transportation of their NLD calls.

"If wireless data market grows, cell operators can really benefit a lot by having just one Unifed network transporting their voice and data traffic", adds Raina.

On the argument that an ISP stands to get undue advantage over cellular providers in country for they don't have to pan UASL, Jahangir agrees they would get a little favor, but feels they were long due for that, "They will, but at the same time ISPs were denied these services for a long time, long enough for the biggies to earn a return on their license fee", he adds.

"Indian regulator needs a crash course on regulation. They get it wrong most of the time," he quips.

Commenting on the quality of VoIP acting as factor for up take of VoIP in India, Jahangir contends that better quality can be offered on VoIP than PSTN provided adequate bandwidth is provided.

"Bandwidth is more of an issue than VoIP technology", sums up Raina.