VoIP-based calls buzz gets louder

It pays to have a landline telephone connection, you may soon realise. And those who have surrendered their landline connections, especially in the recent past, might end up ruing the decision.

That’s because, call rates on landline connections may be down to near nothing before long. Besides, the same telephone connection could help a subscriber watch television with greater clarity.

IT and telecommunications minister A Raja had said after reclaiming his berth in the government recently that he would bring down the cost of fixed line calls to as low as 25 paise a minute.

As such, from a telecom operator’s perspective, the low average revenue per user (Arpu) mobile boom is already beginning to taper out. Analysts say there will be a saturation in new consumer addition once the mobile subscriber base in the country reaches 700 million (from over 550 million today).

That’s more reason for landlines to start ringing louder. For all that, low tariffs on landline calls can happen only if landline calls are allowed to ride on the Internet platform (voice over Internet protocol - VoIP), say analysts.

That may be nigh. The Department of Telecommunication had in April accepted the Telecom Regulatory Authority of India’s proposal to allow Internet-based calls. The telecom regulator had in August 2008 proposed that calls in the same network be made free and there be no termination charge when calls flowed between different networks.

Meanwhile, the bandwidth arena too has seen a lot of action. MTNL and other firms have started buying higher bandwidth from bigger Internet service providers.
“I see some shift already happening towards VoIP. Some of the operators are looking to offer greater bandwidth (above 2 mbps) to consumers. Now this surely is not for voice calls as you need a huge volume of consumers to need that sort of bandwidth for just voice calls,” Alok Shende, founder of IT and telecom research firm Ascendia Consulting told DNA Money.

The government needs to start with allowing domestic VoIP calls, he said.
Currently, one can use any PBX to terminate IP and public switched telephone network (PSTN) connections, calls from closed user group (CUG) to CUG and PSTN to PSTN, but not between CUG and PSTN. VoIP in a CUG is widely used in India by software development companies.

For now, telecom operators with fixed line capability, such as BSNL, MTNL, RCom, Airtel and others, would look to increase their broadband subscriber base. “Usage of Internet has to take off first. We can then focus on Internet-based calls,” said an executive from a top telecom operator, requesting anonymity.

However, price acts as a dampener for broadband adoption.  “Bandwidth players have incurred capex in laying fibres. They have to look at effective utilisation and volume to square off their expenses. Since mass broadband usage has not happened in India yet, the price would remain high.

If you compare with that of Singapore, where broadband usage has taken off in a big way, the charges for bandwidth in India are much higher,” said a telecom sector analyst based in Mumbai. 

In a country that sees about 10 million mobile subscriber additions each month, the total broadband user base is about 6 million currently.