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Net telephony to reduce tariffs
June, 19th 2008

Welcoming Trai's initiative in releasing a consultation paper on Issues related to Internet Telephony, the ISP Association of India (ISPAI) has said that if Net telephony is permitted in India, then both mobile and fixed line calls can become substantially cheaper.

ISD calls can come down to 50 paise in its own network and 75 paise in another IP network, for STD calls, this can fall to 15 paise and 25 paise respectively, while local calls will be free in own network and just 10 paise in another network.

Mobile operators, however, are opposing any such move with India being a mainly vanilla voice market. Internet telephony is an application which will promote the goal of NTP99 which is: Availability of affordable and effective communications for the citizens is at the core of the vision and goal of the telecom policy, says ISPAI. ISPAI says unrestricted Internet telephony will provide an excellent opportunity for India to bridge digital divide, especially in rural and remote areas as well as to rural and migrant workers in other areas. It will have positive impact on development of telecom services. Net telephony will increase broadband penetration, increase the government revenue by way of 12.36% service tax and 6% AGR, enhance national competitiveness in the international market, help in curbing the grey market and is an opportunity for the country to earn increasingly higher foreign exchange through ITeS, the ISPAI says.

The ISPs basically re-sell the services provided by the UASL/NLD/ILD operators and are largely dependent on them for most resources for which they pay for. More than 85% of the ISP revenue goes back to the service providers. Government has imposed 6% AGR on Internet Telephony so there will be no revenue loss to the government. Access Providers (PSTN & PLMN) will also get the termination charges so that there will be a win-win situation for ISPs as well as PSTN/PLMN operators, says ISPAI.

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