The VoIP Dilemma of India's Telcos
India's service providers have come under pressure following the publication by the Telecom Regulatory Authority of India (TRAI) of a consultation paper on voice-over-Internet-Protocol (VoIP) services, including Internet telephony.
The telcos have been calling for regulation of VoIP apps, which bypass traditional voice services and can result in lower revenues for operators. The Cellular Operators Association of India , which represents GSM services providers in the country, recently complained in a letter to the TRAI that VoIP apps like WhatsApp, Viber and Skype are violating the existing telecom licensing regime and are just riding over networks owned by telecom companies. Previously, the COAI had insisted that app-based VoIP calls do not conform to telecom license terms and also pose security risks.
"With the advancement of technology, Internet telephony has now become similar to conventional telephony and these providers compete directly with the existing PSTN TSPs [public switched telephone network telecom service providers]," said the Telecom Regulatory Authority of India (TRAI) in its consultation paper. "Therefore it eventually has to be decided what aspects of conventional telephony regulation should apply to Internet telephony service. To encourage Internet telephony services in the country, issues such as allocation of telephone numbers, interconnection, interconnection usage charges and access to emergency service need to be addressed urgently."
Even though data revenues are rising for most of India's service providers, voice still contributes more than 80% of total sales. Yet the growing popularity of VoIP apps, especially WhatsApp, Facebook and Viber, poses a threat to this business. As the quality of the calls improves, more and more subscribers are likely to make use of them.
"Earlier, when the regulator worked on VoIP services regulation, there was a pushback by the government, but this time the consultation paper appears quite comprehensive and is timely," says Amresh Nandan, a research director at Gartner India.
The change in regulation is also required to facilitate voice-over-LTE (VoLTE) calls, which all the main service providers plan to introduce. The hope is that VoLTE will lead to improvements in call quality and a reduction in costs, allowing operators to better compete against the over-the-top players offering Internet telephony services. Reliance Jio , a new 4G player owned by Indian billionaire Mukesh Ambani, is spearheading the move toward VoLTE, believing it can use the technology to differentiate itself from other telcos.
"The challenge is whether we have the relevant provisions for delivering VoIP services by traditional network-based CSPs [communications services providers]," says Nandan. "In addition, service providers would need better quality data networks for VoIP and that is yet to be realized in India. Nonetheless, once VoIP is allowed, it will seriously impact the revenues of all telcos."
— Gagandeep Kaur, contributing editor, special to Light Reading