99 Problems and Skype ain’t one

A colleague commented that Skype and similar technologies which provide VOIP (Voice over Internet Protocol) services enabling the transmission of voice over a data network as illegal in India. I was quite skeptical of the comment since Skype is very well operational in India. So a little research later at the TRAI website skeptical the following. In 1999 the government banned the use of this technology. In the meantime the Department of Telecommunications asked the Telecom Regulatory Authority of India (TRAI) to prepare recommendations on the opening of this technology. The TRAI made recommendations on February 20th, 2002 which were adopted by the Department of Telecommunications on March 15th, 2002. The recommendations mandate that VOIP services may only be provided by Internet Service Providers within their service areas. Moreover ISP’s providing the service must obtain a license amendment to that effect and not to interconnect calls with ISP’s who are not licensed to offer Internet Telephony Services. There are further restrictions on the form of VOIP Services, they may only be used in the following forms:

1) PC to PC (inside or outside India)

2) PC to Telephone (where the PC is located in India and the telephone is located outside India)

3) IP based H.323/SIP Terminals in India to similar Terminals either within India or abroad that employ the Internet Assigned Numbers Authority (IANA) IP addressing scheme.

This restricted allowance to implement VOIP technology is due to TRAI’s concern for the revenue streams of facilities based operators. These operators paid considerable sums to obtain licenses. Moreover there licenses mandate universal service obligations where they are obligated to service in rural and unprofitable areas. The reasoning adopted is that if unregulated VOIP is allowed then it would adversely affect the teledensity goals. However, this seems to being defeated with the increased penetration of broadband. The policy to regulate in my opinion appears quite archaic and requires review.

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