The recent opening up of the Voice over Internet Protocol (VoIP) in India shows how to save serious money over long-distance calls by dialing out over the web.
For the uninitiated, VoIP/Internet telephony uses the Internet to send audio signals between a PC and a normal telephone.
Voice calls with IP cost a fraction of regular telephone charges, particularly useful for long-distance calls.
IP telephony in India – and most other countries – is classified into two segments: business users who use IP telephony over data networks and various ISPs (Internet Service Providers) who provide cut-price ISD calling services using VoIP.
Today the market in India alone is estimated at four billion minutes per year, with VoIP accounting for almost 40 per cent of the country’s outgoing ILD (International Long Distance) traffic.
Internet telephony services can be categorised as PC-to-PC, PC-to-phone and phone-to-phone.
In India, full regulation by TRAI (Telecom Regulatory Authority of India) is still awaited, thus it is primarily the long-distance PC-to-phone segment that has really caught on.
As for the PC-to-PC market, Rajnish Avasthi, a VoIP consultant, believes much higher PC penetration is required for this segment to grow in India.
Depending on the quality of service required by a user, a VoIP call from Delhi to Mumbai varies between Rs10 (US$0.21) per hour to Rs150 (US$3.29) per hour.
“Also, if the Internet user chooses to use free telephony services from the net, then he need not pay a single penny," says Awasthi.
Free Internet telephony services like "Freephone" are freely available over the web and can be used by anyone.
Most players in the market, including HCL Infinet and Sify way2talk, have adopted a pre-paid service model.
Pre-paid cards are available for between Rs100 (US$2.20) to Rs500 (US$11). Once you have the activation code and password you activate your account and a PIN is generated which is used in conjunction with the downloadable dialing program used to make calls.
But the easiest use of VoIP is through instant messengers, otherwise used for text chat. Companies like Yahoo and MSN offer Net2Phone sourced services with their messengers enabling users to make phone calls for free. All you need is a speaker and microphone.
The digitised voice signals traveling across existing IP networks are compressed, resulting in a more efficient and economic utilisation of the network.
The computer treats your voice like an email, breaking it up into packets. Then it sends those packets to the right address and re-assembles them so the recipient can hear your words.
Low infrastructure cost
Cost for new hardware
Low quality transfer
Delays in transmission
Different countries follow different protocols
Further in IP telephony, the same connection is used by multiple users for multiple functions (voice call, data transfer, video call and fax), thereby lowering the cost of calling.
Cheap long-distance calls are one thing, but IP phones can deliver all sorts of additional solutions above and beyond just acting as a regular telephone.
IP allows convergence of various services, so that the same line can be used for faxes, for data transmission and even video phones.
Though corporate users are moving to IP telephones in droves, home users are still not attracted.
Firstly, the government does not have clear stand on deregulation of IP telephony in India. Without the necessary nod from the authorities, service providers do not want to risk investing in large-scale IP infrastructure.
And then there is the question of cost.
Corporate users have their own networks with a large number of users, unlike home users. But Avasthi says that IP networks can be set up for as low as two users.
However, according to Manish Sablok, marketing manager of IP solutions at Tata Telecom: “Hosted solutions might be the key to taking IP to masses.”
With this technology, a single centre can host the IP network for a multiple number of users at multiple locations. Already some private telecom companies are looking at using this alternative for landline applications in India.
A key boost to the widespread use of voice over IP is the arrival of broadband.
Slowly but surely, it is gaining popularity in India. With a broadband connection, a user can make all of their phone calls for free.
Though legally a user cannot call a phone in India, there is no way to stop it.
According to Vipin Tyagi, CEO, Network Programs which provides VoIP solutions: “Government deregulation can change the market as VoIP is the ideal technology for last mile connectivity especially in rural areas.”
So while most experts believe that almost all long-distance calls will be terminated on an IP backbone within five years, getting it is still a tough task for the time being.
Quality or rather lack of it is the biggest problem of IP telephony, but Sablok says IP phones – with the right vendor and service provider – could deliver better quality then normal phones.
Further problems arise in form of investment for new hardware. However, Net2Phone already sells hardware to retrofit existing telephone switching equipment. Its "Max" line allows a VoIP connection to replace between four and 24 telephone trunk lines.
So, does VoIP means goodbye to the traditional telephone companies?
The answer is not anytime soon.
But Internet telephony is the future and is available to the user today.
Not everyone can get it, but if you are a long-distance telephone caller and you have the right tools for access, it is simply too important to ignore.