India: Recommendations On Regulatory Framework For Internet Telephony

Introduction

The Telecom Regulatory Authority of India (TRAI) issued its Recommendations on Regulatory Framework for Internet Telephony on 24 October 2017 (Recommendations).

These Recommendations will be instrumental in laying down an effective regulatory framework for internet telephony (Internet Telephony) in India.

What is Internet Telephony?

Internet Telephony can be categorised as a subset of IP Telephony, which is the carriage and exchange of information (mainly voice) through usage of internet protocol (IP). When voice traffic is transmitted over public internet, it is referred to as Internet Telephony. It must be distinguished from voice over IP (VoIP), where voice is transmitted over a private, managed IP network.

De-linking Internet Telephony from the underlying access network

One of the major points of discussion during the consultation process and the open house discussion was whether telecom service providers (TSPs) should only be allowed to provide Internet Telephony using their access networks, or also using another TSP's network or a wi-fi network.

Several TSPs were of the view that their subscribers should not be permitted to access their telecom services using public internet as it would result in bypassing of STD and ISD calling mechanism and tariffs. As a result, each call would be regarded as a local call and will culminate in huge losses for TSPs due to shift in voice traffic from public switched telephone network to public internet.

They further contended that they have been granted the permission to provide Internet Telephony in their capacity as an 'access licensee,' and not independently. As such, if Internet Telephony is allowed to be provided using public internet (or another TSP's network), it would be against the essence of the license itself.

Another group of TSPs argued that the definition of Internet Telephony under the unified license, i.e. "transfer of message(s) including voice signal(s) through public internet," itself refers to the term 'public internet.' They further contend that Internet Telephony and 'Internet Services' are mentioned as two separate services in the unified license and therefore there is no compulsion for them to be provided together.

TRAI echoed the view of the second group of TSPs and remarked that if the contrary interpretation were to be adopted, it would mean that Internet Telephony is akin to VoIP. In TRAI's view, had this been the case, a separate and specific permission to provide Internet Telephony would not be granted under the license. TRAI also took note of international best practices which suggest that Internet Telephony as a service is not ordinarily bundled with the internet access provided by the TSP.

In view of the foregoing, TRAI has recommended Department of Telecommunications (DoT) to issue a clarification that Internet Telephony should be un-tethered from the underlying access network. Further, according to TRAI, virtual network operators (VNO(s)) should also be permitted to provide un-tethered Internet Telephony.

What does this mean?

As a result of this recommendation, Internet Telephony can be provided by a TSP to its subscriber, who may be using the internet services of another TSP. In other words, a subscriber may use a wi-fi connection to make voice calls to other phones and PCs, without using its TSP's access services.

How will this be achieved?

TSPs will offer Internet Telephony as an application based service. A subscriber will have the option to use the said application or the cellular network of the TSP to make voice calls.

Typically, the TSP allots a number to a subscriber using which such subscriber may make or receive calls. During the course of the consultation, several TSPs suggested that number series being used for cellular services may also be used for Internet Telephony. TRAI adopted this suggestion and has recommended that TSPs should be allowed to allocate the same number for cellular services and Internet Telephony to a subscriber. In simple terms, a subscriber may be able to receive a voice call on their number even when they are not connected to the cellular network of their TSP.

Comments

The Recommendations issued by TRAI are intended to empower the subscribers to determine the manner in which they choose to make voice calls. If DoT adopts these recommendations, voice calls need not be made only using conventional means, which are impacted by factors such as lack of network coverage in some areas, call drops and other disturbances. This technology will help telecommunication transcend these limitations by presenting an alternate means.

In the past, TSPs have been circumspect to capitalise Internet Telephony as they felt that it would cannibalise their revenue from voice services, which were high margin services at that time.

In the current scenario, where internet usage is growing exponentially, this apprehension of TSPs may be put to rest as the revenue generated from data services will be able to off-set the losses that were being sustained in the voice segment. Internet Telephony will surely play a key role in bridging this gap as well as to lessen the impact of over the top operators, who have enjoyed a monopoly of sorts in this domain. Besides, since conventional voice services are already being offered at no charge by several TSPs, the advent of Internet Telephony is not likely to have a significant impact on the revenue of TSPs.

It is relevant to mention that TRAI has also enabled VNOs to provide Internet Telephony, de-linked from the services of their parent TSPs. Therefore, it is clear that the focus is on improving widespread connectivity in consumer interest, irrespective of the medium or technology.

We look forward to the clarifications or amendments that DoT may issue in this respect and will share an update once they are issued.

The content of this document do not necessarily reflect the views/position of Khaitan & Co but remain solely those of the author(s). For any further queries or follow up please contact Khaitan & Co at legalalerts@khaitanco.com

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