Points Of Presence

By Laura Guevin
Editorial Director, Communications Outsourcing

I've spent a lot of time writing about security and privacy issues in the US over the last couple of months, and how new security initiatives have the potential to infringe on our civil liberties. But I'd like to look at the flip side of the coin in this week's column, or more accurately, the flip side of the world. Many countries are loosening their telecom restrictions these days, enabling competition for local and long-distance calling, and even legalizing Internet telephony. So while the telecom market in the US may be fairly stagnant, perhaps we should be looking abroad for opportunities and technological innovation.

India has been a shining example of a country in transition over the past couple of years, and legalized VoIP has been under serious discussion since the country's Communications Convergence Bill was introduced nearly a year ago. It looks like Internet telephony will become a reality in India in just a few months, and Communication Minister Pramod Mahajan said the technology would be allowed as of April 1, 2002. indiatimes Infotech reported last month that legalization will coincide with the privatization of India's state-run telco, Videsh Sanchar Nigam (VSNL ), although Internet telephony offerings would not affect the bidding amount of the company. Divestiture of 25 percent of government holdings in VSNL to a strategic private partner will be completed within the current financial year, which ends in March, according to the Department of Telecom.

Companies slated to compete for the government's stake in VSNL include Reliance Industries, Tatas, BPL, and a consortium consisting of Sterling, Ltd., and U.S. companies TyCom and Century Tel. An official invitation for VSNL bids will be sent out by the last week of December. Privatization in April will end VSNL's monopoly on international calling, and business will be open to unlimited competition, according to a set of recommendations recently submitted to the government by the Telecom Regulatory Authority of India. The government has accepted all of the recommendations, which include charging competitors a one-time, non-refundable fee to obtain a 20-year operating license, as well as an annual license fee of 15 percent of their adjusted gross revenues. The government has not yet decided if other state-owned telcos offering fixed-line local and national long-distance services, would be allowed to enter the international arena.

Mobile, fixed-line, and national long-distance services have already been opened to encourage investments in India's telecom sector. While many of India's states have attracted diverse mobile service providers, the eastern states of West Bengal, Bihar, and Orissa received no bids at a recent mobile license auction. The government plans to come out with new terms by the end of December to attract additional providers to the areas. India's mobile market is expected to grow to 15.68 million subscribers by the end of 2003, from 4.8 million in September of 2001.

International voice communications to and from Pakistan are also expected to be privatized in 2002, when Pakistan Telecommunication Company Limited (PTCL), loses its monopoly status. VoIP traffic from the US and Europe into Pakistan is legal, but all other packet voice traffic is still considered illegal.

I don't have any information about additional governments legalizing Internet telephony traffic, but I am hopeful that as the global economy begins to turn around, more countries will realize the benefits of privatization, as well as the ability to route voice and data traffic over one network.

Laura Guevin welcomes your comments at lguevin@tmcnet.com.