We don’t think these recommendations will have any impact in the short term; they need to receive the mandate of the Indian government before it becomes a policy. Even then, the Department of Telecom may make changes, like they did in case of the recent 3G policy. The impact, if these guidelines were to be accepted in their present form:

On ISPs: The guidelines allow ISPs like Sify, YouTelecom and other ISPs to offer telephony via the Internet, maybe even convert CyberCafes into PCOs (Public Call Office)- ironic, since earlier, it was the other way around. However, the issue remains that VoIP connections will have to follow a numbering scheme.

On Skype and similar services: If you have to use the Internet to call a mobile phone using Skype, Skype will have to be registered in India, you (each user) will have to be issued a VoIP number, and you’ll have to pay tax. The numbering scheme is in itself is fairly restrictive, and it defeats the TRAIs goal of helping increase broadband penetration.

But numbering was also necessary, since specific VoIP numbers will help take care of the governments security concerns. Service providers will have to install Lawful Interception (LI) equipment And it protects the telecom operators interests – free-for-all VoIP usage would disrupt their Voice business.

On National Long Distance Cos: An increase in business for those with National and International Long Distance licenses (NLD and ILD) – including Cable&Wireless (JV with TTK Group), AT&T, British Telecom and Verizon (JV with Videocon). Why? Because ISPs will have to tie up with NLD players for calls and pay a carriage fees on a per minute basis (see Pg 45, section 3.11.23 of Recommendations). Carriage fees is likely to be between Rs. 0.30 – Rs. 0.65 per minute, as per the Interconnect usage charges. Note that NLD operators pay a percentage of their annual gross revenue as license fee to the government. This will now include Internet Telephony revenue as well.

On Calling Cards Business: Is likely to benefit most, now that they can connect to landline and mobile networks within India via the NLD service providers and ISPs. Using VoIP, they can offer cheaper international calls.

On The Common Man: Unless the ISPs are able to scale up and improve the quality of service, don’t expect STD and ISD rates to go down (despite the headlines). This is going to take a while, though we hope we’re wrong about this.

Advantage Sify: Sify has both an ISP license, and an NLD/ILD license via its subsidiary Sify Communications Ltd; hence the carriage fees (mentioned earlier) remains within the company, and they can offer both calling cards and VoIP services via Sify Broadband. However, it’s important to remember that Sify’s access business has been on the decline, and providing good quality of service isn’t exactly their forte’; see this. I’ve had a terrible experience with them as well.

Overall, the guidelines don’t appear to be as revolutionary as they initially appeared to be, but it’s a small step in the right direction. Free and unrestricted telephony, without a numbering scheme, is the order of the day. That may well emerge once there is better bandwidth via 3G, but note that Telecom Operators are blocking mobile VoIP services like Fring*.

Download the recommendations here. Also, do let us know what you think of the impact on the guidelines.

Also read: Regulator Recommends Unrestricted Internet Telephony In India; Separate Numbers For VoIP

*- If on Airtel, try connecting to Fring using Airtel Live! instead of Mobile Office. I switched last month, and have been unable to use Fring.