Internet telephony in India

Available online at www.sciencedirect.com

Telematics and Informatics 25 (2008) 57–71 www.elsevier.com/locate/tele

Internet telephony in India Siriginidi Subba Rao

*

Information Technology, Central Leather Research Institute, Adyar, Chennai 600 020, India Received 16 January 2006; received in revised form 18 April 2006; accepted 19 April 2006

Abstract Internet telephony is a novel and cheaper method of communication and conducting business over the Internet. The paper presents an overview of Internet telephony, its methods, viz. PC-to-PC, PC-to-telephone, telephone-to-telephone and telephone-to-PC; benefits in cost advantage, simplification, consolidation, higher efficiency and reliability, etc., quality issues, protocols and drivers; challenges and regulatory framework; and status of Internet telephony in Asia Pacific region. Further, highlights its potentiality for India, implications of guidelines of Internet telephony, issues of concern, etc. Concludes that Internet telephony cannot make compromises in voice quality, reliability, scalability and manageability, and work seamlessly with telephone systems all over the world. Internet telephony will prove to be a boon for a price-sensitive market like India and rural telephony will receive an impetus. The Government of India may further deregulate the market and allow phone-to-phone telephony through the Internet and open long distance calling within the country for ISPs to realize ‘‘telecom for the common man’’ or ‘‘telecom for all’’ a reality.  2006 Elsevier Ltd. All rights reserved. Keywords: Internet telephony; Protocols; Drivers; Challenges; Regulatory framework; Asia Pacific region; India; Potentiality; Guidelines; Implications and Internet telephony providers

1. Introduction The Internet is a global network that provides a vast range of telecommunication services, including electronic mail (e-mail), the World Wide Web (WWW), telephony, etc. Increasing Information and Communication Technologies (ICTs) convergence is fostering completely new information infrastructures, whereby Internet telephony constitutes the first major wave of new Internet protocol (IP) based services. New technologies and economic opportunity are catalysing a new dynamic in telecommunications, leading to the gradual substitution of traditional Public Switched Telephone Network (PSTN) by Internet telephony. There is awareness among enterprises of the value derived from Internet telephony due to its cost effectiveness, easy deployment and management; best suited for multi-location industries, such as IT services and business process outsourcing companies, manufacturing (automobiles, textiles, pharma, etc.), telecom service providers, *

Tel.: +91 44 24911389; fax: +91 44 24912150. E-mail addresses: [email protected], [email protected]

0736-5853/$ - see front matter  2006 Elsevier Ltd. All rights reserved. doi:10.1016/j.tele.2006.04.003

58

S.S. Rao / Telematics and Informatics 25 (2008) 57–71

banking and financial services companies (Ashok, 2005). The Government of India (GoI) has legalized Internet telephony in April 2002. Despite tight regulations, bandwidth problems and quality-of-service (QoS) issues, it is estimated that more than 50% of all international long distance calls from India are made over the Internet (Press Trust of India, 2005). The paper presents an overview of Internet telephony, its methods, benefits and quality issues, protocols, drivers, challenges and regulatory framework. Further, discusses its status in Asia Pacific region and its potentiality and implications of guidelines in India. 2. Overview of Internet telephony Internet telephony is a technology that allows transmission of voice packets over the Internet. The technology converts voice signal into a digital signal and transmits it in packets using IP. Thus, Internet telephony uses a packet-based transmission approach rather than circuit-based used by the legacy voice networks. At the sophisticated level, these technologies are integrated into Next Generation Network (NGN) architecture, in that Internet telephony is only one of multiple convergent services. Though, Internet telephony first became a reality in February 1995 when Vocaltec, Inc. introduced Internet phone software designed to run on a 486/ 33 MHz or higher PC equipped with a sound card, speakers, microphone and modem, but only since 2004, the market started to develop significantly (Heuermann and Nielinger, 2006; IEC, 2006). Factors such as accelerating demand for voice, low voice network penetration, national broadband deployment policies, high voice tariff barriers, tightly regulated circuit-switched voice environments, etc., are favoring rapidly emerging IP market (Ramakrishna, 2003). The terms Internet telephony, Net telephony, Voice over the Internet (VoN), IP telephony, Voice over Internet Protocol (VoIP) are given different meanings by various commentators and no universally agreedupon meaning. The term Internet telephony covers: (i) origination and/or termination of PSTN calls over the Internet, enabling users to make long distance and international calls at very much lower than PSTN rates; (ii) integration of PSTN access into broadband Internet access so that Digital Subscriber Line (DSL) access can be used for telephony and subscribers need not pay for separate PSTN exchange lines; (iii) ability of Internet users to talk to each other and hold conferences solely over the Internet without using PSTN and often with wideband voice quality; (iv) replacement of PSTN by IP based telco networks as part of modernization of networks and with a strong emphasis on savings in operational costs; (v) development of new services to be offered by telcos on next generation networks (Horrocks and Hall, 2004). 2.1. Methods of Internet telephony The Internet telephony can be categorized into four generic methods based on type of devices terminating the Internet calls. These are (i) PC-to-PC: This method is attractive for users who have an Internet access, audio-capable PC and necessary software. In this, calls are transferred from one PC to another PC without any gateway, as calls are not switched by a PSTN. The medium of transmission is always the Internet. This pure IP scenario takes advantage of integration with other Internet services: WWW, instant messaging, e-mail, etc. The costs include ownership and maintenance of hardware: PC with modem, sound or a dedicated device, Internet telephony software (most cases free), charges of Internet access and local call. (ii) PC-to-telephone (Plain Old Telephone System/Service (POTS), Integrated Services Digital Network (ISDN), Global System for Mobile Communication (GSM)): This is an extension of previous method where in PC-callers may reach PSTN calls through a gateway. Under this, conversion of speech into packets takes place on the originating users PC. The process is reversed at an Internet Telephony Providers (ITPs) gateway server, which then dials the called party’s telephone number and, when a connection is made, starts sending the callers speech and transmitting the called party’s speech in the other direction. The costs include ownership and maintenance of hardware: PC with modem, sound or a dedicated device, Internet telephony software (most cases free), charges of Internet access, local call and gateway operator. Gateway operators such as iConnect (http://www.iconnecthere.com/) commercially offer this service.

S.S. Rao / Telematics and Informatics 25 (2008) 57–71

59

(iii) Telephone-to-telephone: This method is attractive for users who want to save on long-distance calls and do not have/want to use a PC, as the case of mobile phone users. In this, the call passes through two gateways: General Switched Telephone Network (GSTN)-to-Internet and Internet-to-GSTN. The customer by using an ordinary telephone dials an access code and then telephone number; the access code routes the call to a special computer gateway (IP network). Companies offering this type of service must optimally place their local computer gateways in strategic geographic areas. The gateways convert audio into data for transmission across IP network and then convert incoming data back into analog signals. The costs include charges of both gateway operators and local call. Gateway operators such as AccessPower (http://www.accesspower.com/itsp/), DeltaThree (http://www.deltathree.com/products/phoneto-phone/index.asp) commercially provide this service. (iv) Telephone-to-PC: This method is useful for users who want to reach Internet users with an ordinary telephone. The costs include charges of gateway operator and local call. In Norway, Telenor (http:// www.telenor.com) provides this service commercially as ‘‘Interfon’’. The International Telecommunications Union has recognized the first three methods. 2.2. Benefits and QoS issues of Internet telephony 2.2.1. Benefits The most significant interest in the race to Internet telephony is cost advantage that this process offers organizations/users due to flat rate and low cost of Internet traffic. The benefits of technology can be grouped as: cost advantage, simplification, consolidation, higher efficiency and reliability, support innovation, etc., (Iptel.org, nd; Waldron and Welch, 2002; King, 2006). • Cost advantage: Customers take advantage of flat Internet rate vs. hierarchical PSTN rate and save money for their long-distance calls routed over the Internet. These savings are based on avoiding telephony access charges and settlement fees, rather than actually reducing resource costs. The sharing of equipment and operations costs across both data and voice users can also improve network efficiency, by using the available excess bandwidth on one network by others, thereby creating economies of scale. The deployment of new IP telephony services requires significantly lower investment in terms of time and money than in traditional PSTN environment. • Simplification: An integrated infrastructure that supports all forms of communication facilitates standardization and reduces total equipment complement. The economies of putting all forms of traffic over an IP based network will attract customers, simply because IP will act as the unifying agent regardless of the underlying architecture. This combined infrastructure can support dynamic bandwidth optimization and a fault tolerant design. • Consolidation: People are significant cost elements in a network, so any opportunity to combine operations and eliminate points of failure, to consolidate accounting systems would be beneficial. In enterprises, Simple Network Management Protocol based management with the appropriate Management Information Base structures can be provided for both voice and date services using Internet telephony. Universal use of IP protocol for all applications will reduce complexity and provide more flexibility. • Higher efficiency and reliability: Since the Internet is a packet switched or connectionless network, all content (voice, text, video, computer programs, or other forms of information) travels as packets over separate network paths for reassembly in the proper sequence at their ultimate destinations. This makes for a more efficient use of network resources and more reliability than the circuit switched PSTN. • Support innovation: Since, IP is an open architecture and free to be used by anyone, permits entrepreneurial firms to develop new hardware and software that can seamlessly fit into the network. In contrast, circuit switched network operates as a closed system and makes it more difficult for innovative developers to build and implement new applications. Further, Internet telephony offers a number of value-added services such as distance learning and call centre applications; multi cast conferencing wherein user can simultaneously confer with a large number of users

60

S.S. Rao / Telematics and Informatics 25 (2008) 57–71

anywhere in the world; and unified messaging wherein user speaks and the system converts it automatically into an e-mail or a fax message. The same is true in reverse process means that one need not read e-mail or fax message but can hear the contents and serves as a real boon for visually handicapped persons (Pandya, 2002). 2.2.2. QoS issues The advantages of reduced cost and bandwidth savings of carrying voice over data networks are associated with some QoS issues unique to packet networks. The select factors that have role in determining QoS include delay or latency, jitter, packet loss and bandwidth availability. • Delay or latency: The time required for transmission of data packets from origin to destination. Further, delay results in two problems: (i) echo: caused by signal reflections of speaker’s voice from far-end telephone equipment back into speaker’s ear and becomes significant when the round-trip delay becomes greater than 50 ms; and (ii) talker overlap: problem of one talker stepping on other talker’s speech and becomes significant if one-way delay becomes greater than 250 ms. Delay can be subdivided into two sub-components as fixed delay components (comprising propagation, serialization and processing) as well as variable delay components (comprising queuing delay, dejitter buffers and variable packet sizes). The sources of delay are accumulation/algorithmic delay, processing delay and network delay. • Jitter or delay variation: Jitter is variation in inter-packet arrival time as introduced by the variable transmission delay over the network. Removing jitter requires collecting packets and holding them long enough to allow the slowest packets to arrive in time to be played in the correct sequence that in turn causes additional delay. • Packet loss: IP networks cannot provide a guarantee that packets will be delivered at all, much less in order. Packets will be dropped under peak loads and during periods of network congestion. But due to time sensitivity of voice transmissions, normal transmission control protocol based retransmission schemes are not suitable. • Bandwidth availability: The reliability level and sound quality that is acceptable among users has not yet been reached and this is primarily because of bandwidth limitations and also leads to packet loss. In voice communications, packet loss shows up in the form of gaps or periods of silence in conversation as clipped speech that is unsatisfactory for most users and unacceptable in business communications. The solutions for QoS issues include: (i) implementation of echo cancellation mechanism to improve speech quality. The ITU standard G.165 defines performance requirements for echo cancellers; (ii) minimizing delay and removing jitter can solve Jitter problem. This has led to development of various schemes to adapt jitter buffer size to match time varying requirements of network jitter removal; (iii) lost packet compensation schemes used by Internet telephony to overcome the problem of lost packets; (iv) techniques such as compression and silence compression achieves quality levels that are tolerated by the users; etc. 2.3. Protocols for Internet telephony Internet telephony is involved in the transfer of voice packets over IP network that has many problems due to the characteristics of IP layer. Many protocols have been suggested to overcome these problems and difficulties. The select ones include: H.323, Session Initiation Protocol (SIP), Media Gateway Control Protocol (MGCP) and Media Gateway Control (MeGaCo) (IEC, 2006). • H.323: It is a standard that specifies components (terminals, gateways, gatekeepers, multipoint control units), protocols and procedures that provide multimedia communication services over packet networks, including IP based networks. It is part of a family of ITU-T recommendations called H.32x that provides a non-guaranteed QoS. H.323 encompasses both point-to-point communications and multipoint conferences. One of the primary goals of H.323 is interoperability with other multimedia-services networks. • SIP: It is an application layer control protocol for creating, modifying and terminating sessions with one or more participants. The sessions that SIP is concerned include: Internet telephone calls, multimedia confer-

S.S. Rao / Telematics and Informatics 25 (2008) 57–71

61

ences and multimedia distribution. The architecture of SIP is similar to that of HTTP (client-server protocol). It is Internet Engineering Task Force’s (IETF’s) standard for establishing VOIP connections. • MGCP: It is a protocol that defines communication between call control elements (Call Agents or Media Gateway (MG)) and telephony gateways. It is a control protocol, allowing a central coordinator to monitor events in IP phones and gateways, instructs them to send media to specific addresses. In MGCP, call control intelligence is located outside gateways and is handled by call control elements and synchronize with each other to send coherent commands to gateways under their control. Cisco and Telcordia proposed MGCP architecture. • MeGaCo: It is for control of elements in a physically decomposed multimedia gateway that enables separation of call control from media conversion. It addresses the relationship between MG that converts circuit-switched voice to packet-based traffic and Media Gateway Controller that dictates service logic of that traffic. MeGaCo has resulted as a joint effort of the IETF and the ITU-T (ITU-T Recommendation H.248). MeGaCo/H.248 instructs a MG to connect streams coming from outside a packet or cell data network onto a packet or cell stream such as Real-Time Transport Protocol. It is similar to MGCP from an architectural standpoint and controller-to-gateway relationship, but MeGaCo/H.248 supports a broader range of networks, such as ATM.

2.4. Drivers for Internet telephony The key drivers behind Internet telephony are derived from its intrinsic technical and economic characteristics. Mas (nd) grouped these drivers into six categories: market structure, regulatory structure, technological characteristics, functional service characteristics, economic cost structures and dynamics of innovation. These drivers aid to understand the short-term advantages and long-term sustainability of Internet telephony as a commercial proposition and of its regulatory treatment. Table 1 provides the opportunities and threats for each category of drivers for ITPs.

3. Challenges to PSTN operators and regulatory issues While telecommunication services are largely regulated and subject to universal service contributions, license requirements, tariff filings, consumer protection obligations, quality of service standards, market entry limitations and price/profit restraints (price cap regulation); the Internet and Internet telephony are largely unregulated, not subject to prior mentioned obligations and have relatively easy market entry capability. Therefore, Internet telephony challenges traditional regulatory structures because it converges telecommunications features and the Internet. The existing regulatory regimes were established before the advent of the Internet and regulators may choose to add Internet telephony into legacy regulatory regimes or develop a new framework. The foremost challenge Internet telephony poses risks for incumbents and their traditional fixed line business based on PSTN. In developed countries, market shifts towards IP based services and increase competitive pressure on incumbents. The threats come from cannibalisation of existing products on one hand and loss of market share on the other. If developed country carriers develop a coherent technological and market strategy, they will mature as competitive full service providers. The conventional service providers are responding to Internet telephony providers by reducing call charges, offering bundled service packages (many free local calls and reduced cost for long distance calls), providing their own Internet telephony services, etc. The regulators around the world are in a dilemma to define voice services over the Internet, as voice or data. If it is defined as a telecommunications service or a publicly available telecommunications service it will be subject to heavier regulation and may deter investment in the service. If it is made subject to lighter regulation, existing operators migrate all their voice services to Internet telephony and dilute regulatory requirements, thus leaving regulatory frameworks in tatters. In developing countries where fixed voice services are not fully liberalised and the Internet offers a means of bypassing PSTN and high accounting rates (Horrocks and Hall, 2004).

62

S.S. Rao / Telematics and Informatics 25 (2008) 57–71

Table 1 Key drivers of Internet telephony: their opportunities and threats (adopted from Mas (nd)) Internet telephony Driver category

Opportunity

Threat

(1) Contesting uncompetitive markets

• Circumvent bottlenecks at core PSTN network and weakens the position of telecommunications operators whose market power is derived from control of carriage • Cost drivers vary from PSTN and offers clearly differentiated pricing structures • Cost is less distance-sensitive than PSTN services • Less dependent on peak load than PSTN, as the Internet has flexibility to accommodate peak load at the expense of quality • Higher flat access charges and lower usage charges • Commonly treated as data or value-added service, with very few licence restrictions or conditions attached • ITPs benefits from interconnect obligations of PSTN operators to which they connect at gateways • At present, ITPs are not required to make any contributions towards access deficits or universal service obligations of incumbent operators. In contrast, new operators that originate PSTN calls may have to make such contributions that place them at a competitive disadvantage • Impossible to distinguish voice from data due to digital nature of Internet traffic. The inability to detect Internet calls makes it very difficult to give them equivalent treatment to PSTN traffic, even if that was a regulatory intent • In-built silence suppression enables packets to be created only when there is sound to be transmitted. PSTN requires capacity to be reserved for the full duration of call and even at times no sound is being transmitted • In-built stochastic multiplexing that is inherent in packet-based communications, offers more flexibility for efficient utilization of network resources • Digital nature of Internet traffic offers more flexible voice compression possi- bilities • In-built network resilience facilitates in automatically re-routing of packets, if the network is affected by external circumstances. The PSTN requires explicit resource duplication to ensure resilience • Offers different grades of voice service, as different packets can be treated differently (prioritization and tolerance for errors). PSTN is generally designed with one level of overall quality, as there are specific bottlenecks that condition quality across entire network • Offers many advantages for voice-data integration and for Computer-Telephony Integration applications such as call centres and collaborative working. This results from end-to-end digital nature of Internet calls and potential for implementing single terminal devices for voice and data on Internet applications

• Cannot by itself solve the problem of far-end interconnect, because key bottlenecks in telecommunications networks lie in access segment • Operators who control access will still be able to protect their PSTN business to some extent • Not yet offer full any-to-any connectivity • Compatibility problems due to a variety of software packages • Still less straightforward to implement than to obtain a new PSTN line; subject to systems integration problems (hardware, software, communications links, etc.) • In future, regulatory treatment of Internet telephony may be similar to that of voice, rather than data or value-added services. This put it on an equal status to PSTN calls and precludes regulatory arbitrage. It remains to be seen how effective this can be in practice

(2) Regulatory arbitrage

(3) Technical efficiency

(4) Expanding services and functionality

• At present, quality is lower than PSTN, partly from congestion over the Internet due to no costs. In future, better quality could be secured through a price-based packet prioritization system • Involve an inherent loss of quality, even if sufficient network resources could be guaranteed for a given call • Internet communications incur substantial packet overheads, such as packet labels and error correction protocols, and to resend packets. PSTN signaling overheads are tiny in comparison and more content can be packed into the same bandwidth on PSTN than on the Internet • The Internet is less reliable; subject to crashes and power cuts that do not generally affect PSTN • Widespread customer acceptance and exploitation is still in question due its infancy, quality perception problems, relatively difficult to install and use • Requires terminals and software that are more expensive and specialized than ordinary phones • The Internet was not specifically designed for real-time applications and ITPs find it difficult to manage congestion. As a result, users may face with trade-off between higher functionality and lower quality

S.S. Rao / Telematics and Informatics 25 (2008) 57–71

63

Table 1 (continued) Internet telephony Driver category

(5) Exploiting economies of scope and scale

(6) Dynamics of innovation

Opportunity • Offers greater capability for encryption and better suited for governmental, commercial or banking applications • Exploits integrated voice-data network management and maintenance systems, offers the possibility of exploiting higher bandwidth, as it ‘free rides’ on the Internet. Thus, it gains substantial cost advantages even if it is not intrinsically more efficient for voice communications than the PSTN • Benefit from cost savings deriving from commoditisation of equipment; induce a shift in value from hardware to software, transmission to processing and dedicated core assets to consumer electronics peripherals • The Internet world is defining its standards faster than telecommunications world, due to the fact that Internet and IT standards are controlled by industry rather than by governments or official supra-national forums • Internet users have had greater control over innovation because new technologies and applications can be implemented locally on terminals and gateways. In telecommunications environment, most innovation occurs at the core of network, e.g. Intelligent Network Platforms

Threat

• Limited scope for scalability in today’s commercial Internet gateways. This may change in future when gateways mature as products and benefit from cost reductions inherent in normal product life cycle

• If standards are set on the basis of industry precedents, results in ‘lock in’ technology too quickly, lack of interoperability between different Internet telephony systems, at least in the short term while precedents are established and standards become entrenched • In telecommunications, early systems do not tend to be ‘locked in’ due to more protracted and consensual approach to standards formation. As a result, more appropriate technologies may take longer time to develop, have a better chance of becoming entrenched

The main difference between Internet telephony and normal PSTN voice services is that parties who do not provide Internet telephony service undertake the service carriage. This separation of content carriage and service provision is a fundamental change, and challenges existing approaches to regulation. It is common to offer several services over the Internet and services that are not as demanding as voice, not been subject to extensive regulation. Further, regulators will make their decisions on the basis of technology, when they should be concentrating on standards of service. The latter approach may result in different levels of service for voice with different levels of regulatory obligations. The customer would then be free to choose combinations of quality, price and regulatory guarantees. The new regulatory requirements include: balancing of licensing frameworks for voice and data regulation; defining of interconnection regimes for interconnection obligations including access fee payments (retail or wholesale) and possible distinctions between local and long-distance traffic; in Universal Service Obligations, regulators have to assess the likely impact of Internet telephony on rural telephony and the role of ITPs in universal access promotion schemes; legal interception for traffic data retention or encryption; adjustments in national numbering plans to take care of numbering resources for both PSTN voice and Internet telephony services; access to emergency services to route Internet telephony emergency calls to nearest emergency centre; etc. These and similar issues are a clear call for regulators to overcome traditional voice data distinctions and develop a coherent regulatory approach in favour of innovative private sector participation and broader public policy goals (Heuermann and Nielinger, 2006). The present voice services regulation is based on a PSTN rationale that has evolved over many decades, intrinsically linked to engineering and performance of purpose-built voice networks, and also influenced the development of capabilities of PSTN equipment and networks. The Internet telephony has different technical characteristics and operational relationships from PSTN. The most fundamental are separation of carriage and service provision, use of a multimedia data network to carry voice services rather than an engineered end-to-end network and specification of performance characteristics of customer premises equipment. Hence,

64

S.S. Rao / Telematics and Informatics 25 (2008) 57–71

the existing PSTN regulation cannot be directly applied to ITPs, in most countries. The solutions to provide location information for emergency calling and other purposes are being developed, but they require consumer’s broadband access provider or Internet Service Provider (ISP) to add specific capabilities to their networks. The QoS will be largely under the control of broadband access provider, not the ITP. If these conditions are to be mandated by law, broadband access providers need to invest in capabilities to support services they do not provide and directly earn revenue. ITPs wanting to have these capabilities available for their users would have limited or no ability to ensure they are present or effectively maintained. It follows that industry regulators will need to direct obligations to the parties best able to achieve them. 3.1. Regulatory framework Most countries are resolving the challenges presented by Internet telephony in different ways, using different sets of criteria and goals in their decision-making and grouped under four categories: (i) Internet telephony is permitted without restriction: Developed and industrialized countries adopted this category and avoided classifying Internet telephony as traditional telephony. In the USA, all forms of Internet telephony have been left unregulated to date and have developed unfettered by regulations (pricing, entry requirements, universal service contributions, QoS, etc.) that are applied to traditional telephony. However, the Federal Communications Commission (FCC) is currently reevaluating this informal policy due to different views taken by few states. The justification for this is to encourage emerging technologies; encourage migration to IP-based networks; facilitate users more freedom of choice; benefit consumers by reducing long distance prices; encourage trade; and uncertainty regarding how to regulate this evolving technology. (ii) Internet telephony is prohibited: The rationale behind this is to maintain incumbent revenues especially those lost to bypass of the PSTN and revenues from international settlements where fixed system is state-owned or a transitional monopoly; notion that Internet telephony can be effectively regulated even when high cost differentials exist; and newness of technology not well understood. The considerations for allowing Internet telephony is help to achieve national objectives like economic growth and development; increase communication services to underserved and unserved areas; improve communication service and reduce cost to consumer; increase capacity in education sector; establish a cohesive, stable, transparent and legitimate regulatory process; may actually increase total usage and thereby overall sector revenues; and requires review of excessive dependence on international settlements. With or without Internet telephony, many other forces (World Trade Organization, FCC, International carriers, etc.) are working to move international settlement rates closer to cost. (iii) Some forms of Internet telephony permitted: Some countries are charting a middle course that allows some forms of Internet telephony, but restricts others such as termination on PSTN. The GoI has permitted three methods of Internet telephony, viz. PC-to-PC (both within and outside India); PC-to-telephone (PC in India and telephone outside India) and IP based terminals for telephone to telephone (both within and outside India) according to guidelines (discussed in Section 5). (iv) No policy on Internet telephony: Many nations have not yet addressed this complex issue. They can take advantage of this position by incorporating the most current thinking on policies regarding converging technologies. The policies issues that may require regulatory attention include Universal access/service (should Internet telephony be required to contribute to these funds), security/surveillance, numbering (affect the availability and use of telephone numbering resources), market entry/license requirements, consumer protection, interconnection, etc. Many countries are currently considering the issues raised by Voice over Broadband (VoBB) services by deploying two types of regulations: (i) light touch regulation (European Union, Hong Kong, Malaysia, Singapore and the United States) aimed at promoting provision of these new services with the main focus on VoBB’s emergency calling capability; and (ii) technology-neutral approach (Canada) by considering VoBB

S.S. Rao / Telematics and Informatics 25 (2008) 57–71

65

is just another voice service and subject to the same regulation as PSTN voice services. Countries, like Korea and Japan, have a mixed approach to VoIP services, with PSTN access regulated essentially as normal voice and other VoIP lightly regulated (King, 2006).

4. Potentiality for India The potentiality of Internet telephony for citizens of India includes: (i) It provides a cost effective means of communication; (ii) Its deployment facilitates telecommunications to reach masses and enable all sections of society even those who are currently being deprived due to distance or purchasing capacity; (iii) It enables consumers to have choice of premium and non-premium quality of service according to their need and purchasing capability; (iv) It throws open long distance telephony to those sections of society that could not afford the same earlier; (v) It results in huge cost cutting for businesses that in turn may help in increasing Gross Domestic Product of India; (vi) It acts as a key driver for local entrepreneurs to set up Community Information Centers, Cyber-kiosks, Internet dhabas, etc., in small towns and villages as an effective means of providing affordable communication to public at large; (vii) Its consequent impact results in higher utilization of resources (access device and network) thereby accelerating returns on investment that in turn motivate expansion of network infrastructure in remote areas; (viii) Improvement in accessibility goes a long way in bridging the digital divide; (ix) It acts as a killer application that makes distance learning, telemedicine, e-governance, etc., a reality. In India, Web-based contact centers present major opportunity for remote areas; and (x) The penetration of PC and telecom may also grow in small towns and rural areas that trigger an overall multiplying effect. The Internet telephone technology has tremendous implications for India, viz. (i) These new developments can open up some parts of the Internet to a large majority of Indians who are poor, illiterate and no knowledge of English language; (ii) The ability of computers to convert text to spoken speech benefits people who cannot read to a limited extent from the wealth of information available on the Internet; (iii) There is immense potential for software development in this new area that bridges large networks of conventional telephony and the Internet. The thriving Indian software industry could take advantage of this; (iv) Export oriented Indian companies may use cheaper international telephony through the Internet to off-set the long-distance call rates (more than twice as expensive to call the US from India, than vice versa) to become internationally competitive; and (v) Apart from multinational Telcos, small companies can also provide Internet telephony services to their local communities; thus, encouraging this technology would be consistent with the Indian policy of encouraging small-scale sector. 5. Internet telephony in Indian context The policies governing IP-based communications are rapidly evolving around the world. Countries that once banned Internet telephony for all purposes are beginning to understand its value to their citizens. Though the Internet came to India for public use on August 15, 1995, the legal and regulatory framework did not permit ISPs to offer Internet telephony till March 31, 2002. It was permitted with varying degrees of regulation in 40 countries. Table 2 provides the status of Internet telephony in Asia Pacific region (Global IP Alliance, 2005). The Indian Government’s New Telecom Policy of 1999 (NTP’99) envisions affordable and effective communications for the citizens of India. Thus, the NTP’99 opened up of Internet telephony and permitted the ISPs to process and carry voice signals from April 1, 2002, subject to broad guidelines. The gist of guidelines (Department of Telecommunications, India, 2002; Gupta, 2005) include: • Only ISP licensees are permitted to offer Internet telephony within their service area. • Scope and definition of Internet telephony services: Internet telephony means an application service that the customers of ISPs can avail from their PCs capable of processing voice signals or other IP based Customer Premises Equipment (CPE) such as PC-to-PC (both within and outside India), PC-to-telephone (PC in India to telephone outside India) and IP based H.323/SIP terminals in India to similar terminals both in

66

Table 2 Status of Internet telephony or VoIP in Asia Pacific region (Adopted from Global IP Alliance (2005)) Countries

Categories Major operators

Existing law for VoIP

General characteristics of VoIP law

Is VoIP allowed

Who can offer VoIP

Active VoIP proceeding

Australia

Australian Competition and Consumer Commission

Telstra

No, regulations are being developed

NA

Yes

Presently reviewing telecommunications regulations

China

Ministry of Information Industry

China Mobile, China Netcom, China Railway, China Telecom, UNICOM, Ji Tong

No

NA

Yes

Hong Kong

Office of the Telecommunications Authority

Hongkong CSL, Hutchison Telephone Company

No

NA

Yes

Currently no restrictions. Several ISPs offering IP telephony services through calling card and PC-to-phone services and most major telecoms carriers are developing and providing VoIP Currently no restrictions. All major operators and many other companies offer phone-to-phone VoIP service as subscription and calling cards, where users dial an access code before the called number Currently no restrictions on providers, but this will change when new regulations take effect

No

Yes; preliminary view that the minimum and proportionate level of regulation should be applied. VoIP services that provide substitute services for public telephone services to meet certain minimum conditions for connectivity, emergency services, and number portability

S.S. Rao / Telematics and Informatics 25 (2008) 57–71

Govt. control agency

Since 2002, VOIP has been considered an application service. PC-to-PC calls are allowed to both domestic and international destinations, but PC to telephone calls are only for domestic to international calls NA

Licensed service providers

No

Yes

No policies or regulations that apply specifically to VOIP. Several companies are currently providing services Existing telecommunications operators are allowed to provide VOIP services under the license they were issued under the repealed Telecommunications Act of 1950 Currently no restrictions on VoIP providers

No

Providers must obtain a Special Type II service license

No

Telecom Regulatory Authority of India

Department of Telecommunications, Videsh Sanchar Nigam Ltd.

Yes

Japan

Ministry of Public Management, Home Affairs, Posts and Telecommunications

Nippon Telegraph and Telephone Corporation

No

Malaysia

Malaysian Communications and Multimedia Commission

Telekom Malaysia Berhad

Yes

The Communications and Multimedia Act of 1998 requires VOIP service providers to obtain an Application Service Provider Individual license

Yes

Singapore

Infocomm Development Authority of Singapore

Singapore Telecommunications Ltd.

Yes

Yes

Taiwan

Directorate General of Telecom, Ministry of Transportation and Communications

Chunghwa Telecom

Yes

Under Communications and Multimedia Act of 1998, VOIP service providers need an Application Service Provider Individual license. Existing telecommunications operators are allowed to provide VOIP services under the license they were issued under the repealed Telecommunications Act of 1950. Taiwan’s 1997 Type II Services Administrative Rules amended to include VOIP as a Special Type II service in 2001

Yes

No

Has an open public consultation concerning policy framework for IP telephony and electronic numbering

S.S. Rao / Telematics and Informatics 25 (2008) 57–71

Yes

India

67

68

•

•

• • •

S.S. Rao / Telematics and Informatics 25 (2008) 57–71

India and abroad, employing IP addressing scheme of Internet Assigned Numbers Authority (IANA) only. The ISP node can be assessed through authorized facilities of authorized cable operators subject to provisions of Cable Television Networks (Regulation) Act, 1995. The ISPs Internet telephony service is different in nature, scope and kind from real time voice, offered as telecommunication service by operators such as Basic Service Operator (BSO), Cellular Mobile Service Operator (CMSO), National Long Distance Operator (NLDO), Public Mobile Radio Trunked Service (PMRTS), etc., under their existing license. Services that do not fall under Internet telephony service: These include: (i) voice communication (from anywhere to anywhere) by means of dialing a telephone number (PSTN, Integrated Services Digital Network (ISDN), Public Land Mobile Network (PLMN)) as defined in National Numbering Plan; (ii) originating voice communication service from a telephone in India; (iii) terminating voice communication to telephone within India; (iv) establishing connection to any Public Switched Network in India; (v) dial up lines with outward dialing facility from nodes; and (vi) interconnectivity among ISPs who are permitted to offer Internet telephony services and ISPs who are not permitted to offer Internet telephony services. QoS and tariff/fees: These are not prescribed at present and shall be prescribed from time to time by Telecom Regulatory Authority of India/Licensor. Security monitoring: ISPs carrying Internet telephony traffic through their Internet gateways need to set up suitable monitoring system, at their own cost, as per requirement of the security agencies. License agreement: ISPs desirous of offering Internet telephony services are required to sign an amendment to the ISP license agreement to such effect.

5.1. Implications of guidelines Following are the implications due to guidelines on Internet telephony in India (Kumar, 2002). • In India Internet telephony is being described as ‘‘telecom for the common man’’ or ‘‘telecom for all’’. It remains unclear whether common man will have access to it, as the user requires a PC. The low level of PC penetration (14 per 1000) in India (5.5 million PCs) and the need for a computer to use the technology will prevent a significant number of telephone users from using it. Further, the fact that only international calls can be made means, it will be used by an extremely small segment of population (Katakam, 2002). • The entry conditions for Internet telephony seem to govern to protect the turf of basic, cellular and longdistance service operators who have paid licence fees for concessions granted to connect and terminate calls to customers rather than technological advances and capabilities of Internet telephony per se. • The cable operators have been permitted to provide Internet telephony as ISPs. Today, in India around 38 million homes connected by cable, including those that do not have a telephone. The Information and Broadcasting Ministry is making efforts for conditional access, by means of a set-top box (STB). The STB facilitates Internet and Internet telephony through an inbuilt cable modem, which is an IP terminal for the purpose of telephony. The market potential for this service is over 80 million TV homes in India. These could be connected by cable at no cost to the government, towards a major step in meeting the teledensity objectives of NTP’99 and Convergence 2000. • The telephony regulators world wide, emphasizing on the need to cater to four criteria: calls to emergency services, battery back up, directory assistance and QoS. If Government wants to permit cable telephony to houses that do not have access to any other phone, how these objectives be attained when PSTN connections are prohibited. • Around 90% of India’s 3.5 million customers use dial-up access to connect to the Internet. ISPs providing dial-up services are looking for fresh revenues as Internet telephony. The entry conditions to Internet telephony prescribes IANA numbering scheme (IP address) to be used for the customers and no PSTN number can be allocated. Thus, subscribers to such services must be content with making outgoing calls only and connections to any telephone or PSTN network in India are not permitted. • Interconnectivity is heart and soul of a telephone network. The entry conditions of Internet telephony in India prohibit interconnection to PSTN; hence, the business opportunities available to ISPs are from PC-to-PC, and PC-to-phone calls (overseas). This might help some cyber cafes to provide outgoing calls.

S.S. Rao / Telematics and Informatics 25 (2008) 57–71

69

• ISPs are not allowed to put up media gateways in India and hard pressed to sell its services. Further, to connect to PSTN, they need to go to overseas carriers or clearing-house exchanges such as iBASIS (http://www.ibasis.net/) and Internet telephony Exchange Carrier Corporation. • Internet telephony is not a bonanza for ISPs. Most ISPs would be better off in an arrangement that pays a revenue share and with a right to interconnect. However, the Department of Telecommunications (DoT), India (2005) announced that fixed line telecom operators are permitted to provide Internet telephony including telephone handset to telephone handset, as a major development as all the future developments in telecom would use IP. Despite a significant increase in Internet subscriber base, Internet telephony service is yet to make it big in India. ISPs are unable to tap market potential existing in the country due to issues of access to last mile connectivity and unrestricted telephony access. About 5.9 million Internet subscriber base and 3.9 lakh broadband connections exists as on June 2005. The adaptation of Internet telephony in India is on the express lane to prosperity and growth. The industry is expecting a compounded annual growth rate of 119%, resulting revenues around INR 1300 crore or US$3.25 billion for 2005 and has the potential to grow three times more than the present (Wadhwa and Chakraborty, 2005). ISPs that are migrating to broadband services, the cost of providing Internet telephony is merely incremental with much greater revenues (Ashok, 2005). 5.2. Issues of concern The select issues of concern about Internet telephony in India include: (i) why to treat VoIP and Internet telephony as separate entities or can be merged into one category as IP telephony, due to blurring of distinction between managed and unmanaged networks, (ii) ways and means of making technology neutral Internet telephony access devices at customer premises, as newer devices are surfacing, to monitor/enforce any technology at CPE, (iii) arriving decisions about QoS for Internet telephony vis-a`-vis normal circuit switched/ managed VoIP, (iv) facilitating ISPs network full interconnection (both-way) with PSTN/PLMN by treating it at par with telecom network, (v) choice of numbering scheme for the Internet telephony provider, such as E.164 or similar to NLD/ILD or separate access code or E.num or IP addressing, (vi) provision to ensure access to emergency numbers by Internet telephony subscribers, (vii) ensuring balancing level playing field issues between Internet telephony providers and long distance telecom operators in revenue share, Universal Service Obligation, Access Deficit Charges, etc., (viii) enforcing adequate security related issues for Internet telephony and (ix) bringing grey operators into regulatory ambit (Gupta, 2005). 6. ITPs Enterprises are early adopters and driving market for Internet telephony in India. Skype (http://www.skype.com/) is leader in the arena. It is a program for making free calls over the Internet to anyone who also has Skype; works with most computers, available free to download and use. It offers video capability to its own IP telephone offerings. Yahoo Messenger (http://messenger.yahoo.com/) and Google Talk (http://www.google.com/talk/) are also offering free PC-to-PC calls, globally. Microsoft is the latest entrant to harness Net telephony and in association with Philips, announced a new Dual Phone (Digitally Enhanced Cordless Telephone) that combines the functions of a normal landline phone with cheaper Internet telephony option. Customers in Europe, South America and select countries in Asia, will have three calling choices: make free PC-to-PC calls through Microsoft’s Windows Live Messenger; use a low cost PC-to-Phone service, by subscribing to one of the Web based IP phones services, among whom, MCI has a number of Indian affiliates; or make normal landline calls through local providers (Microsoft Corporation, 2006). ITPs are offering equal importance to retail segment where non-PC IP device serve as a PC-substitute for Internet telephony. These standalone devices serve as vehicle for delivering Internet telephony to retail/home users. Thus, owning of a PC is no longer an issue for making Internet telephony calls. Networking product companies such as Cisco and D-Link are offering a new breed of combined landline and Internet phone handsets in India. HCL Infinet (http://www.hclinfinet.com/) is offering Yapjack (a telephone with a built-in modem) that

70

S.S. Rao / Telematics and Informatics 25 (2008) 57–71

helps to make Internet telephony calls. Further, ITPs are making efforts to bring Internet telephony closer to masses through retail chains of Internet cafes and Internet telephony-enabled PCO booths. Sify (http:// www.sifycorp.com/) offers through 500 iWay Internet cafes and Net4India offers through a network of 175 Telecentres (IP-enabled PCO booths) across the country and runs on a franchisee model (Pasha, 2003). According to Internet Service Providers Association of India (2005), there are about 132 Indian ISPs holding licence for Internet telephony. Out of that, 40 fall under category A (covers all-India), 62 under category B (covers 20 territorial circles and four metro telephone systems of Delhi, Mumbai, Chennai and Calcutta plus Bangalore, Hyderabad, Ahmedabad and Pune) and 30 under category C (covers secondary switching area – equivalent to a district, excluding eight cities defined in category B). In 2002, when Internet telephony debuted in the Indian Internet market, about 120-odd ISPs are offering this service. However, there are only 50-odd ISPs now, holding operating licenses and about six are actively offering the service (Natti, 2005). The select list of ITPs in India include: Phonewala (http://www.phonewala.com/), Valufon (http://www.valufon.com/), Sify Way2Talk (http://way2talk.sify.com/), BOL Anmol (http://anmol.bol.net.in/), IceTel (http://www.icetel.co.in/), helloworld (http://dialhelloworld.com/), Webfone (http://webfone.bsnl.co.in), etc., with freely downloadable proprietary dialer software, variable denominations of calling cards and varying tariff. 7. Conclusion The Internet and its underlying TCP/IP protocol suite have become the driving force for new technologies, with unique challenges of real-time voice being the latest in the series of developments. Internet telephony cannot make compromises in voice quality, reliability, scalability and manageability, and work seamlessly with telephone systems all over the world. With immediate need for increasing teledensity, growing communication needs of emerging corporate sector and opening up of call centres besides other value-added services, Internet telephony will prove to be a boon for a price-sensitive market like India. Rural telephony will receive an impetus, as rural consumers will have access to an array of affordable telephony and value added services. The government may further deregulate the market and allow phone-to-phone telephony through the Internet and open long distance calling within the country for ISPs to realize ‘‘telecom for the common man’’ or ‘‘telecom for all’’ a reality. References Ashok, B., 2005. Has VOIP arrived? Available from: . Department of Telecommunications, India, 2002. Guidelines for issue of permission to offer Internet telephony services. Available from: . Department of Telecommunications, India, 2005. ILD and NLD licenses simplified. Available from: . Global IP Alliance, 2005. Global VoIP policy status matrix. Available from: . Gupta, S.N., 2005. Existing scenario and issues pertaining to Internet telephony and VOIP in India: TRAI presentation. INFODEVTRAI Workshop on Convergence, Internet Telephony and Regulatory Issues, March 10, New Delhi. Heuermann, A., Nielinger, O., 2006. VoIP – The looming challenges for operators, regulators and policy-makers. Available from: . Horrocks, J., Hall, R., 2004. Voice over IP – total confusion? Nexus 1 (3). Available from: . IEC, 2006. Voice over Internet protocol. Available from: . Iptel.org, nd. IP telephony overview. Available from: . ISPAI, 2005. List of Internet telephony licences as on 31.05.05. Available from: . Katakam, A. 2002. Telecommunications: the Internet telephony alternative. Available from: . King, G., 2006. Regulating VoIP for emergency services. Available from: . Kumar, A., 2002. Internet telephony: can it ring louder? Available from: . Mas, I., nd. Drivers of Internet telephony. Available from: . Microsoft Corporation, 2006. Philips and Microsoft to launch cordless, Internet telephone for Windows Live Messenger Users. Available from: .

S.S. Rao / Telematics and Informatics 25 (2008) 57–71

71

Natti, S., 2005. Indian Internet telephony yet to take off. Available from: . Pandya, S.C., 2002. Net telephony: a new chapter in telecom revolution. Available from: . Pasha, A., 2003. Internet telephony rings loudest in the enterprise. Available from: . Press Trust of India, 2005. 50 per cent of ISD calls in India made from Net. Available from: . Ramakrishna, S., 2003. The global impact of IP telephony. Available from: . Wadhwa, G., Chakraborty, P., 2005. Adopation of IP telephony on express lane to growth. Available from: . Waldron, G.J., Welch, R., 2002. Voice-over-IP: the future of communications. Available from: .