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Monday, March 25, 2002
Lead Article

Here comes Net telephony!
Peeyush Agnihotri

THIS year, Mr. Sekhon, Dr Bhardwaj and Ms Manchanda are all awaiting April 1. No, they are neither too eager to play April Fool’s Day pranks (they are well beyond that age) nor are they looking forward for new investments during the next financial year. In fact, they have nothing in common except for the facts that they all are law-abiding citizens, they live in Punjab, their sons are settled abroad and they have computers at home.

Still, they are waiting for Monday next, keenly. Dr Bhardwaj has even encircled the date with a red pen. The reason is that on this day the PC would pip the bakelite phones — provided everything goes on as per schedule.


The government is scheduled to make Internet telephony (Voice over Internet Protocol or VOIP for short) legal from April 1, 2002. So that means that anyone who has a PC with a modem at home no longer needs to rush to the nearest ISD booth to say ‘kya haal hai’ to his kin abroad. All that is needed is a PC, relevant software, accessories like a headphone, speaker and a microphone.

Rajesh Gupta, a STD-ISD PCO booth owner, is, however, dreading this date. It was last year that BSNL made dialling between cities situated within 200 km radius possible by prefixing ‘95 in front of the city code, a move that left STD- PCOs virtually vacant. As if that was not enough the STD tariff was reduced by 60 per cent two month’s ago this year. Reeling under ’95 prefix syndrome and cut in rates, Rajesh rues: "Saab, ab toh bhatta baith jaiga hamara!" Viewing this issue from his perspective, this would mean a loss of Rs 3,000 to 4,000 per month that he earns from ISD calls. "PC is ubiquitous now in every household. Who would then come to us for calling abroad?" he asks.

It’s official

To sum up the general mood is in extremes—either ecstatic or despondent. Before we start off with what everyone would be in for, let’s make the present scenario clear. VOIP was already prevalent in India, albeit illegally.

Law-abiding citizens were not making VOIP calls while ‘bidding-away-the-law’ citizens were never caught, primarily because there was almost no trace of the calls that were actually made. The ‘law-breakers’ ensured that the mode of payment to the VOIP service providers left no trace either. Add to it, poor knowledge about the IT Act, archaic laws (this was punishable under the Indian Telegraphs Act, 1885 with a fine of Rs 50) and easy accessibility to VOIP-enabling sites. To keep a tab on anything on the Web is rather difficult. The government tried blocking such sites but nevertheless the winds of change swept WWW and Internet telephony grew by 450 per cent last year.

The result was that Videsh Sanchar Nigam Limited (VSNL), the corporation that has a monopoly over international calls, was in a quandary. What do you do when you cannot hold a person from dialling ‘illegally’ abroad? Make it legal, dial with them and charge for it. That is what it did exactly. Last week, the government accepted Telecom Regulatory Authority of India’s recommendations on VOIP, made it legal and now subscribers would be able to use their PCs and avail of voice communications from April 1.

VSNL earns more than $ 1.5 billion per year and it has nearly 80 per cent of its revenue coming from overseas calls. It is, however, taking all this with a pinch of salt. According to media reports VSNL Managing Director S.K. Gupta said at a seminar held in Mumbai recently that international long distance operations are likely to suffer a loss of Rs 6,000-10,000 crore in foreign exchange due to the absence of arrangement for sharing charges for Internet telephony. "Incoming international traffic is much higher than calls originating from India and this has high revenue loss implications," he said.

It has been estimated that India will be the fourth largest market in the Internet telephony sector in Asia-Pacific by 2004 after China, Japan and South Korea. Globally, PC-to-phone traffic reached 280 million minutes per month.

How VOIP works

VOIP can well substitute a normal ISD calls. The VOIP technology digitises speech that is transmitted as compressed data. The data is split and sent over the Net in packets. This is later reassembled. At present, the voice quality is, however, poor, though within acceptable limits. It is certainly not as good as you would expect from high quality national long distance service. There is often a delay between a speaker talking and his being heard. This can be attributed to latency i.e. generally speaking, the period of time during which one component in a system spins wheels waiting for another component. Latency, therefore, is wasted time.

Given thousands of competing service providers in this field, improved voice quality is to be expected. Already it is improving, as frequent callers vouch. VOIP rates can run as low as Rs 5 per minute as against Rs 60 per minute via ISD. For a frequent caller this means a lot of saving.

VOIP can be used for PC-to-PC and PC in India to telephone abroad calls. Most of the software needed to run VOIP does not take a lot of space on the hard drive. They consume just a few megabyte of space and an Internet-enabled Pentium machine is sufficient.

Hardware & software

A category of hardware and software enables Netizens to use the Internet as the transmission medium for telephone calls. For users who have free or fixed-price Internet access, Internet telephony software essentially provides free telephone calls anywhere in the world. There are many Internet telephony applications available. Some, like CoolTalk and NetMeeting, come bundled with popular Web browsers.

As far as hardware goes, the minimum requirement is a P II, 350 MHz PC with 64 MB RAM, a good quality motherboard, Intel chipset and 128-bit full duplex sound card.

A powerful computer equipped with more available memory, a faster and a stable Net connection ensures that the voice signals process increases. This improves the quality of the conversation so that it becomes almost equivalent to regular telephone conversation. It may even surpass the sound quality of regular telephone conversations. The caller can also add headphones, video camera, video card handsets and speakerphones. Sites like net2phone, dialpad and tel3 provide software that may help those desirous of using Internet telephony.


PC penetration in India stands merely at 0.3 per cent. Still, International Data Corporation (IDC) is projecting the picture optimistically. IDC is of the view that IP telephony and other IP-based services technology are enabling one in many ways — the strategy of running voice over an IP backbone and connecting to Public Switched Telephone Network (PSTN) at either end of the call has enabled service providers to undercut the rates significantly creating a market-driven initially by price competition. "In response to IP services and other forms of competition, PSTN prices will fall. As the price advantage of IP telephony decreases, competition will move to the other benefits of IP, such as value-added and enhanced services. IP telephony will then shift position. No longer running as an underground parallel technology, it will become a mainstream proposition," an IDC report on IP telephony in India concludes.

As an emerging outsourcing destination for call centre services, India has the potential to realise tremendous gains from VOIP. The IP convergence in call centres can ease the cost, complexity, and manpower constraints. That is the future. At present, the lifting of the ban on VOIP has not excited them. "Right now, the sound quality is not good. There is often a delay between when a speaker actually talks and when she is heard. Due to this latency factor we would rather prefer to go via the international link dedicated channel," Atul Gupta, CEO of a call centre says.

Jubilant ISPs

The government categorically pointed out last week that only Internet Service Providers (ISP) licencees would be allowed to offer Net telephony services within their service areas and that they would be required to sign an amendment to their licence agreement. No doubt, ISPs are surfing the VOIP mania wave now. To start with, VOIP will begin from ISP-run cyber cafes and the caller will have to purchase a pre-denominated card. This would indicate the amount and talk time permitted by the ISP. "There will be paradigm shift in the market. Net telephony is going to be launched in a big way and the ISP scene of operation would shift to this field. VOIP would cost merely 10 cents per minute and we would ensure that our subscribers get trouble-free service through 10 Internet nodes spread across Punjab. Special connections would be provided to ensure that there is lower latency," Sandeep Sharma from Glide says and adds that he forsees an increase in competition.

Increase in competition, did we hear? Already Satyam, another ISP, is working round the clock to formulate a strategy that the officials have for the time being kept under the wraps. "Those subscribers willing to pay for leased line or broadband would definitely get a better service. Speed and connectivity are crucial in this new field and we are awaiting commercial reports," Dinesh, Accounts Manager, Enterprise Solution, Satyam, says.

To sum it up all, when the next time your kid brother calls home from abroad do not accuse him of being an emotional fool blowing away greenbacks. With VOIP, he might be acting penny wise, pound wiser.

VOIP without PC

Is VOIP possible sans PC? What does a person do if he doesn’t have a PC? Well, he or she can use Yap Jack. A Yap Jack enables the caller to place cost-saving Internet calls without a computer. Simply plug the regular phone into the Yap Jack and connect it to the phone line. All you need is an ordinary touch-tone telephone, a telephone line connection, a local phone company service with a touch-tone service and an ISP with PPP (Point-to-Point Protocol) compatibility. Yap Jack would enable a person to make cost-saving Internet phone calls globally for as low as 3.9 cents per minute and the caller can ring any phone in the world through the ISP. Phone calls from one Yap Jack to another would be free. The device is an interface between a touch-tone phone and the Internet. It makes a phone IP-enabled, capable of accessing the Net for voice calls. Net2Phone is the manufacturer of this device and the market grapevine is that this company plans to enter India through a tie-up with one of the ISPs. This might even make the ISD- PCO booth across India heave a sigh of relief. "Yapjacks are being discontinued. There will be a better product coming out in April. Information on this product will be listed on Yapgear.com. If you do need one now, you can purchase one from yaptalk.com or ebay.com," officials at yapgear.com told Log in...Tribune.

Sites that may enable VOIP