One Giant Leap For Internet Telephony
In a move that is sure to have a major impact on the Internet telephony
market -- not to mention revolutionizing India's telecommunications
infrastructure -- the government of India has decided to legalize Internet telephony
in April of 2002. Communications Minister Vilas Paswan made the
announcement last week, commenting that Internet access is expected to
have reached most of India's towns and villages by that time next year.
The April date for legalization will also coincide with the end of
state-owned Videsh Sanchar Nigam Ltd.'s
(VSNL) monopoly on international long-distance service -- two years ahead
of schedule. The government is selling off part of its stake in VSNL,
reducing its holdings from 52 percent to 26 percent of the company.
Reliance Industries, India's largest private sector company and the parent
company of private Reliance Infocom, will bid for a 25 percent stake in
VSNL. Revenue from international long-distance service accounts for 90
percent of VSNL's revenues, and the company says it is looking at domestic
long-distance, improved Internet access and data services, and possibly
cellular services to broaden its offerings.
The delays and complications that have surrounded discussion and
passage of India's Communications Convergence Bill made me question
whether the country would legalize Internet telephony any time soon (see
column on the bill). The bill calls for a converged infrastructure and
governing body for data and telecommunications, and would prepare India's
networks for carrying packetized voice calls. But last week's announcement
confirms what many Internet telephony companies were already prepared for,
and the push to build out India's voice over data networks can now begin.
Tom Evslin, chairman of ITXC Corp.
(operator of the ITXC.net global IP telephony network), says that on a
global basis, India
may benefit the most from Internet telephony over the next four
years. ITXC has worked with China Telecom and other carriers to build out
IP telephony in China, and believes the same growth is possible in India.
"India is already a worldwide leader in information technology, but
suffers from a telecommunications infrastructure which is inadequate for
the country's potential economic growth. The Internet capacity now being
built for data will serve an enormous additional benefit as the
infrastructure for widely available voice services. These services include
using the Internet as an affordable backbone for traditional
phone-to-phone calls and new services which combine voice and other forms
of data," said Evslin.
The Indian government's Economic Survey forecasts the country's
Internet users will increase from two million to 15 million subscribers by
the end of 2003. Three to four people are estimated to use each
subscription. And ZDNet India reports that India will be the fourth
largest market for Internet telephony in the Asia-Pacific region by 2004,
behind China, Japan, and South Korea.
AN EARLY IMPLEMENTATION?
Consulting Web site India
Bandwidth reported last week that VoIP services may come to India
before next April. The site said that another state-owned phone
company, Bharat Sanchar Nigam (Bangalore
Telecom) will introduce VoIP by the end of this year. The company will
provide the service to compete with private information technology venture
Reliance Infocom, which will also offer VoIP-based telephone services (although not until
2002) over a massive optical fiber network. Reliance
plans to have 60,000 km of broadband networking equipment in place by
2002. The company has a slight advantage in deploying Internet telephony
in that it does not have an existing circuit-switched infrastructure in
place. Bangalore and VSNL will need to upgrade their existing
circuit-switched networks to offer converged services.
The jury is still out on what will become of the Communications
Convergence Bill, although Parliament may take action on it as early as
July. In the meantime, the bill has been open for public comment and
received criticism earlier this year at a seminar organized by the New
Media Forum. Some speakers at the event called the bill "draconian
and unacceptable," because it gives the government the power to
appoint all nine members of the Convergence Commission, the regulatory
body that would be formed through the bill. The bill also gives the
Commission the power to enforce codes on material to be broadcast, and
critics claim the codes could be ambiguous or have the potential to be
However the government ultimately decides to enforce
communications laws, the legalization of Internet telephony will have a
lasting impact on telecommunications in India. And someday soon, the reach
of packet networks in India may very well surpass that of existing
Laura Guevin welcomes your comments at firstname.lastname@example.org.