IP Telephony And India

You must have seen really cheap calling rates from IP telephony providers like Skype to US, and European countries.

Infact for US, you can get an unlimited calling plan to all phones for as low as $3 a month. Why no such thing in India?

One can call US phones for like 1cent a min, while calls to Indian phones remains as high as 3-4cents a min. To understand what’s wrong in case of India, we need to first understand little bit of VoIP and IP telephony stuff.

VoIP – you must have heard of is simply Voice over Internet Protocol. It’s simply a method of converting voice into packets and then sending it across the Internet. Now, one must note that Internet is a “packet switching” based network i.e all data is converted into small “packets” and sent across various possible routes.

For packets flowing on Internet, there is no specific hard coded route, instead route depends on availability of media, congestion, peers of networks etc. When you access Internet in India, there can be chances that you are sending packets to US via Europe and at the other movement there can be chances that few packets might take the other route via Singapore. And since you are sending just “packets”, so you use pipes only when you are sending data, and rest of the time, those pipes are available for use to other people.

This kind of model of “packet switching” takes down the cost of expensive Physical network, and makes Internet lot cheaper as compared to phone calls. In case of telephone system – it still depends on “circuit switching” thus when you connect to a person on phone, you actually “lease” a route between you and the other party.

Now, even when you are not speaking on phone, that “leased route” remains un-available for use by other people. This makes phone calls bit expensive as compared to calls made over Internet network between two computers.

Now, next part is IP telephony. There is little difference between IP telephony and VoIP. IP telephony is an application which works over protocol named VoIP. IP telephony refers primarily in making phone calls from IP networks to telephone networks.

So, it’s when you call a US based phone from service like skype which runs over the internet (an IP network) to your friend in US on his phone (on telephone network). These calls are lot cheaper as compared to an ISD call. Reason is – since you are using Internet, most of the part of your route is covered using Internet itself over cheap packet switching based infrastructure. Call is “bridged” from IP network to PSTN network at the closest point, essentially making it a “local” call.

Coming back on orignal topic – point is why calls from India to US are so cheap over skype (and other IP telephony providers) as compared to calls from US to India?

It’s because of one of policy of Indian government which permits use of IP telephony given bridging between IP network (i.e Internet) and PSTN (i.e phone network) is not done in India. So, if you make calls from US to India using skype, calls are bridged to PSTN network in US itself, and then is routed across (expensive) International long distance networks over circuit switching.

Rule, that you cannot bridge calls in India makes it expensive to connect Indian phone network with other networks in world. That’s the reason most of users and corporate consumers prefer IP phones or just skype which eventually keeps Indian users on IP network itself eleminating cost of ISD calling.

Why Indian govt. has banned bridging in India?

This is taken in order to prevent revenues of telecom business. If IP telephony is permitted, we will eventually see services like skype offering virtually unlimited calling on Indian phones for as low as $1-$2 a month killing off business of domestic telecoms.

The request is still up in front of Govt. from long time but till now, it has not been approved. Apart from domestic calling market, IP telephony will effect ISD badly – taking off most of market, and so the revenues of incumbents. Even there are many ISP’s in India which are not in telecom business and just offering Internet like Sify, Tikona etc.

If IP telephony is permitted, most of such small ISP’s will setup their own bridging and will eventually start offering fixed line services running over VoIP – low and pretty good in quality (considering it will be all digital as opposed to current analog PSTN lines).

Ban on IP telephony remains one of reasons which kept cost of BWA spectrum low – since at the end, BWA players can just offering broadband and not phone services. Remember, they can surely offer phone services but only to countries like US, Europe etc for a very rate. They can’t offer calling to India for rates like 1p/sec as they have to route all those calls from US, which will increase cost (and even degrade the performance).

So, well that’s all about IP telephony to India. With hope that you will be eventually a better connection next time, bye for now!