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November 3, 1997


The phoney phone

The buzz in India is 'Web telephony'. And
corporations are picking up the line.

Internet telephony has finally hit India, much to the chagrin of the country's telecom bosses, the Department of Telecommunications and the international telecom carrier, the Videsh Sanchar Nigam Limited.

Though the threat of Web telephony has always loomed over the telecom giants, the recent noises are all in reaction to the trend of organisations joining
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individuals who have been using the Internet to route real-time voice messages.

Leveraging the low tariffs on Internet telephony calls, several Net-savvy entrepreneurs in the country have started offering Internet telephony software and installation services for a charge.

After starting as a trickle in the southern cities of Bangalore, Coimbatore and Hyderabad, telephony services are taking on the dimensions of a flood in the metropolitan cities of Delhi and Bombay.

Premiere Infosystems, a NOIDA start-up, recently began offering installation of software for voice services over the Net at less than 50 paise per minute. To put this in perspective: an international one-minute call on a normal basic telephone would cost about Rs 75. Premiere Infosystems has been inundated with business enquiries.

The infrastructure required at the subscriber's end is remarkably limited: a multimedia personal computer and Net telephony software besides a high-speed modem - which all Net surfers have in any case.

Software - like 'Net-to-phone' - can be easily downloaded from the Net. The cost of installing the software is less than Rs 2,000, after which every call - domestic or international long-distance - will be billed at the cost of a local call: a maximum of Rs 1.40 per minute.

Best of all, calls can be made to other telephones or to other computers rigged up with multimedia kits.

Predictably, DoT and VSNL are upset about the trend catching on.

Says a senior DoT official: "We are aware that individual Net surfers have been using the (telephony) software for personal purposes. But this (commercial) service is not acceptable and we plan to take action against it. We received information about a Hyderabad-based public call office offering the service and have sent them a show-cause notice."

The department and the international carrier have good reason to be scared. Some 60 per cent of DoT's Rs 130-billion revenue comes from long-distance calls, while VSNL's Rs 53 billion turnover is entirely based on the high international call tariff it levies.

Phillips Tarifica, a London-based consultancy, has estimated the impact of Net telephony on VSNL at $54 million (Rs 1950 million). The impact on DoT has not been deduced.

But, as a Delhi-based Netizen, who has been using Net telephony for over six months now says: "It's just a matter of time before the rug gets pulled from under DoT's feet. There are over a 100,000 Net surfers in the country and the government's own target is some 1-2 million by the year 2000. These will be the more prosperous consumers and typically are the guys who make long-distance, especially international, calls."

The only silver lining in the dark clouds before DoT and VSNL is the poor quality of voice and reception on Net 'phones'.

But even this last edifice is expected to crumble, given the rapid advance in transmission technologies and data compression techniques.

Earlier: VSNL will lose $54 m to Net telephony by 2001

- Compiled from the Indian media

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