India’s telecom regulator recommended that Internet service providers (ISPs) be permitted to interconnect with one another to enable Internet telephone calls between their respective customers using numbers that are modelled on normal phone numbers.
Until now, Indian consumers had been allowed to make only such voice calls within the network of a single provider. The proposal by the Telecom Regulatory Authority of India (Trai) is part of its recommendations to the government on reviving the ISP industry.
The regulator, however, continued with a ban on Internet telephone calls to fixed-line and mobile phones.
“The biggest beneficiaries, in terms of end-customers, will be small enterprises who do not need or cannot afford dedicated connectivity between their offices,” said Romil Shetty, director of the telecom practice at consultant KPMG’s Bangalore offices. “If they are not extremely particular about the privacy of the voice or video calls, ISPs can provide such customers voice and video-conferencing solutions over the public Internet at a fraction of the current costs.”
Trai also said the ISPs, including the ones that run their services on cable television networks, can allocate a number to their customers for receiving voice and video calls from other Internet customers. It also clarified that ISPs can use any instruments, not just computers, to reach their customers. Such instruments could be wireless or cable-based devices. “We have opened up everything for Internet telephony except connecting the traffic from the mobile and land phone,” said S.K. Gupta, advisor to Trai.
Even as it opened up the scope for Internet telephony, Trai has suggested imposing a 6% share of ISP revenues as licence fees, up from the 6% currently charged on just Internet telephony revenues.
The regulator banned ISPs from offering any service which cannot be accessed outside its own network, including Internet-based television and virtual private networks. It also sought to bring them on par with telecom operators by suggesting the extension of the 74% foreign investment limit to ISPs as well.
The ISP industry representatives were unhappy with the extension of the 6% levy on to their total revenues and the recommendation for a ban on issuing or renewing city-level licences and value added services like Internet TV.
“There should be a pass-through for the 6% levy for the revenues from the consumer, because the bandwidth for which the consumer is being taxed is already taxed at various levels, for example, at the level of international long-distance operator or the national long-distance operator,” Rajesh Chharia, president of the Internet Service Providers Association of India. He also criticized the termination of the issue or renewal of city-level ISP licences.
Trai, however, said the Internet TV service was being banned as the Cable TV Act of 1995 banned such TV content from being distributed by ISPs or telecom operators.