The ruling has created a row in India because while ISPs get a new source of income for free, fixed line and mobile players are objecting that they paid high market entry fees.
Under the proposed plan people could call from their personal computers with Internet connections to a landline or a mobile phone. It is expected that the cost of calling in India will fall even further. It is already one of the cheapest places in the world.
The regulator said that the big idea was to put India's telecom sector in tune with global trends. It also thinks it should improve broadband penetration.
The Cellular Operators Association of India chief TV Ramachandran told AP that the regulator's proposal was not fair to existing telephone companies. They had to stump up millions of rupees to get a license, while ISPs didn't, he pointed out.
Other telcos have warned that the move will threaten their business.
But 'those in the know' point out that it will take years before broadband subscribers pose a threat to fixed-line and mobile licence holders. There are only 4.38 million broadband subscribers in India in comparison to 287 million mobile users and 38.9 million land line subscribers.
India watchdog calls for VOIP
By Nick Farrell on Aug 26, 2008 8:14AM