No, net telephony isn't the same as voice Over Internet Protocol (VOIP). The former is about using a pc, or an IP phone to call another phone, pc, or IP phone over the net. The second is the use of IP (internet protocol) switches in telecommunication networks. Most modern networks do this: it facilitates voice to be converted into packets of data, thereby optimising the use of bandwidth. There have never been any question marks over the legality of VOIP. Net telephony, in contrast, was declared illegal in India until the government gave into the demands of Internet Service Providers (ISPs).

	Help-Line For ISPs
	A Yen For Falling
	Pizza and Pizzazz
	A Year Or A Lifetime?
	Hippa, Hippa, Hooray
	Innovating Out Of A Downturn

So, what do the rules say?

The guidelines issued by the government say that only ISPs can offer net telephony from April 1 this year. All they would need to do is sign an amendment to their original licence agreement to be able to carry and process voice signals. Calls from a pc to another pc anywhere in the world, and from a pc to a phone outside India will be legitimate. Internet protocol based H.323/sip terminals (like the IP phones we referred to earlier) in India can also be used for net telephony within the country as well as outside. However, the guidelines ban calls made from a pc to a phone within the country. Some say the ban is difficult to enforce. And TRAI (Telecom Regulation Authority of India) is yet to notify the tariffs.

Who can offer net telephony services?

Actually, anyone can. The rules stipulate only ISPs will be able to offer these services, but anyone can become one. An ISP licence can be obtained at a cost of all of Rupee 1.

How much will it cost?

ISPs can offer net telephony at negligible cost. The only cost will be bandwidth, and those rates too are expected to fall from the existing Rs 96,000 for a 54 kbps line connecting 500 km or more and Rs 22 lakh for a 2 mbps line for the same distance. Consumers, though, may have to pay up to Rs 5 a minute to make calls to a number in the US. Then, there's the fixed cost component of a pc with a soundcard, microphone, and an internet connection. An IP phone could cost anything between Rs 25,000 and Rs 85,000.

Is there a business opportunity in it?

There is, but it won't be big. Voice quality in net telephony is far inferior to that of voice calls made the traditional way. The cost advantage gets nullified because corporates, which account for a chunk of long-distance traffic, are sticklers for voice quality. ''I won't make a business call if it requires me to repeat a sentence four-five times,'' says Pranav Roach, President, Hughes Network Systems India. Ultimately, not more than 10 per cent of long-distance traffic is expected to move to the net. In the US, it is a mere 7 per cent.

Should traditional telecom companies be worried?

Some long-distance traffic, especially international, is expected to shift initially. However, the highest tariff for long distance calls within the country is already down from Rs 24 a minute to Rs 9. Once private players start international services, the peak tariff-Rs 45 a minute now-is expected to come down by over 50 per cent. Most basic telephony companies (jargonspeak: Fixed Service Providers) will feel some impact, but the smart ones will either acquire ISP licences or drop rates further.

The key issue, says Delhi-based telecommunications analyst Mahesh Uppal, ''is 'interconnect', since calls will be terminated on a different network, which would want to be paid to complete calls from networks which could well be competitors''.

That could mean ISPs, which now depend on FSPs, may have to rejig their business models and maybe invest in some infrastructure, such as international gateways of their own if they want net telephony to generate enough revenues to keep their heads above the Plimsoll.

-Suveen K. Sinha

HELP-LINE FOR ISPs
The decision of the US to impose a duty on steel imports from developed countries such as Japan, Russia and the EU may actually hurt India.

(From left) Data Access' Siddhartha Ray, Sify's R. Ramaraj, and Net4India's Jasjit Sawhney: IP bailout

The first two months of 2002 weren't kind on India's Internet Service Providers. Growth in subscriptions, once a healthy 54 per cent a month, plummeted to under 10 per cent. And losses mounted. April brings with it a slim sliver of hope: the government has allowed ISPs to offer internet telephony services; and the entry of private players into international long distance (ILD) telephony should see a fall in international bandwidth prices, a key component of an ISP's costs. Most ISPs have already gone to town lamenting about how they can't charge subscribers anything for internet telephony. ''They've been using dialpad.com for ages to make calls; why should they pay us,'' goes the logic. Deep down, though, the ISP industry is thrilled to bits. Here's why?

First, every ISP worth his or her dialtone can block sites like dialpad.com. Two, isps are now free to ally with basic telephony companies. The latter can offer their subscribers the option of net telephony. The rates, says Jasjit Sawhney, CEO of Net4India, could be as low as Rs 10 a minute, as compared to the existing Rs 45 a minute. The catch? Some litigative soul could protest that ISPs don't have ILD licenses to start charging customers for services, even if these 'customers' are basic telephony companies. Now, are you surprised Net4India, Sify, and Data Access are willing to shell out Rs 25 crore in entry fees and Rs 45 crore in guarantees to secure ILD licenses?

-Vinod Mahanta

J-LOW
A Yen For Falling
The possible devaluation of the Yen is cause of concern for India.

The impact of a falling Yen on India will make Pearl Harbor look like high school picnic

Events in faraway Japan could soon spell trouble for the Indian economy. Stifle the yawns, this piece isn't about the ills plaguing the Japanese economy; instead, it is about the possible impact of a devaluation in the Yen on the rest of the world, in general, and India, in particular. That should not surprise anyone: this is Japan we are talking about, the world's second largest economy with a GDP of $46,771 billion, and exports valued at $479.3 billion.

The country's largest trading partner, the US, will have to sign off on any devaluation, and possibly will, in return for greater access for American goods to Japanese markets. And imports of Japanese goods, made cheaper by the devaluation, into the US will increase most likely at the cost of exports from the EU and China into that market. ''This will result in another round of trade disputes, but it could also lead to competitive devaluation by these countries in search of alternate markets,'' says T.K. Bhaumik, a senior economist at the Confederation of Indian Industry.

Were China to devalue the Yuan, some South East Asian countries such as South Korea and Thailand could find their own exports threatened. Result? They could look to India as a possible dumping ground. Worse, they could look to Latin American and African markets where India is trying to establish itself. India could end up having to devalue the rupee, but with imports accounting for 11 per cent of its GDP (exports do just 8 per cent), that won't be an easy decision to make.

-Ashish Gupta

PAN-THEON
Pizza and Pizzazz
A quick take on who's on top of the toppings game in India.

FREE-WAY
A Year Or A Lifetime?
Yearly payments could be the solution to the ills plaguing the toll-road concept.

It sticks out like a fragment of the first world -a 8-km long highway where cars can do over 100 kms a hour on unmarked asphalt. Only, the Noida Toll Bridge Company (NTBC), that runs this road connecting Delhi to Noida isn't seeing the traffic that will translate into the stipulated 20 per cent annual return on its Rs 400 crore investment before it transfers ownership to the National Highways Authority of India in 2030.

Experiences such as this have prompted NHAI to opt for annuity schemes over Build-Operate-Transfer ones. Over the past six months, it has awarded seven such. The private company builds the road. The government collects toll and pays the company a fixed amount every year. ''This is a great step forward,'' gushes Pradeep Puri, Managing Director, NTBC. ''The private player doesn't need to worry about the traffic.'' Still, this doesn't mean the end of the road for b-o-t schemes. ''Once economic activity picks up, so should traffic,'' says Abhijit Bhaumik, Director, Feedback Ventures. Right now, though, they're roadkill.

-Swati Prasad

TECH BANDWAGONS
Hipaa, Hipaa, Hooray
The Indian software industry's search for a Y2K clone to resurrect its flagging fortunes may have finally succeeded.

Heard of hipaa? no it isn't a genetically modified hybrid of a hippopotamus (Hippopotamus Amphibious) and an aardvark (Orycterus Afer). It is the inelegant sounding successor to y2k, Dow 10,000 and Euro Conversion. hipaa stands for the Heath Insurance Portability and Accountability Act, a US law passed in 1996 mandating that healthcare providers adopt a standard electronic format for patient information.

Effectively, hipaa is a set of standards aimed at making healthcare, and health insurance more efficient. The standards have now been laid down, and a deadline (October 2003) fixed. ''There is enough work for the next five to seven years,'' exults Dr Saji Salam, the head of the Healthcare Practice at Bangalore-based Vmoksha Technologies.

Gartner estimates put the it spend of the healthcare industry in the US between $40 billion (Rs 1,84,000 crore) and $60 billion (Rs 2,76,000 crore) in 2004. Given what happened closer to y2k, the bulk of this could go into hipaa-related work over the next three-to-four years. But the rush of Indian companies wishing to tap the opportunity has had a negative fallout. ''Many Indian vendors couldn't deliver,'' says Chari Mudumbry, Vice President, HTC Global Services, a Bangalore-based company that expects revenues from hipaa to contribute Rs 34.5 crore ($7.5 million) to its kitty next year. Result? ''US companies now have stringent vendor competency levels.''

The new strike hasn't gone unnoticed. Staking their claims are Infosys, TCS, Polaris, even Apollo Hospitals. But with competition hotting up from Irish and Australian companies, it won't be as easy as the Y2K cakewalk. Hold your cheers for now.

-Nitya Varadarajan

HOT-PRODS
Innovating Out Of A Downturn
The products are hot, but will that help their owners set the market afire.

A battery-free radio for the masses, a fabric that keeps the wearer cooler than the environment by as much as five degrees, a talking washing machine that takes the housewife through complex wash cycles, and trousers that can accommodate every single digital doodad today's road warriors carry, with nary a bulge. Marketers are pulling out all stops in an effort to offer tangible benefits that differentiate their offerings from that of the competition.

''The benefit of temperature control will give our brand a consumer differentiator,'' says S. Krishnamoorthy, Executive President (Textile and Apparels Division), Grasim Industries. If that's about the pursuit of cool, then Philips' battery operated radio is all about thrift. Targeted at the rural audience, it is powered, like toys of yore, through a simple wind-up mechanism. As for Dockers, ''the innovation is in keeping with the hi-tech, mobile lifestyle,'' says C.S. Suryanarayan, MD, Levi Strauss (India).

Have the innovations found takers? Philips is selling 20,000 units of the radio a month and Grasim expects 20 per cent of its Rs 100-crore turnover from textiles to come from Ice Touch. Maybe there's sense in the retro notion of real product benefits.

-Vinod Mahanta