The Hindu Business Line : Net telephony usage outpaces the long distance market

A quick call
Growth has been due to increase in broadband usage and more customers are using the Internet for making voice calls.
Consumers may prefer to use Internet Telephony since they do not have to pay access deficit charges.

New Delhi , July 3

Four years after it was permitted, Internet Telephony usage has finally shot through the roof.

From a mere 56 million minutes of usage during the third quarter of 2005-06, it has gone up to nearly a billion minutes during the fourth quarter ended March 30. This is bigger than the outgoing international long distance (ILD) telephony market, which is pegged around 600 million minutes a quarter.

According to the data compiled by the Telecom Regulatory Authority of India, the reason for the huge growth is due to a surge in the numbers being reported by the Tatas-managed Videsh Sanchar Nigam Ltd (VSNL).

Growth drivers

VSNL officials said that the growth in Internet Telephony has been due to the increase in broadband usage and more customers are using the Internet for making voice calls. They also said that the recent policy announcements made by the Government permitting Internet Telephony for domestic calls might also have added to the growth.

Internet Telephony was launched in the country in 2002. Thirty-two Internet Service Providers have been offering the service, even though 121 were given permission by the Government. However, market watchers said that the surge could be due to under-reporting by the operators in the earlier regime where ISPs were offering the service without paying any licence fee.

"But now since operators have to pay 6 per cent of their annual revenues as licence fee, they are being forced to report the right numbers," said an executive.

The other reason, say market watchers, is that consumers may prefer to use Internet Telephony since they do not have to pay access deficit charges. In comparison, users have to pay ADC for ILD calls which makes Net telephony cheaper.

Analysts also pointed out that the bottlenecks that were preventing Internet Telephony to take off in a big way have now been removed.

These included lack of adequate bandwidth and a highly regulated licence regime.