According to a report from The Economic Times, telecommunications regulator TRAI has launched a consultation on internet telephony guidelines.

Today, India's regulations do not permit ISPs to offer internet telephony to terminate on landlines and mobiles within the country. However, since January 2006, all telecom service providers are allowed to offer full-fledged internet telephony services. So far, only state-owned MTNL has launched internet telephony services within India.

"Telecom companies have failed to launch internet telephony as they fear that that this would eat into their revenues. For instance, if ISPs are allowed to launch these services, we can offers ISD at Re 1/minute, STD at less than 50 paise/minute and local calls between 10-15 paise/minute. This is a fraction of the cost offered by the large telcos for similar services," explained an ISP representative.

"Use of internet telephony for calling landlines and mobiles abroad has already generated competition in the International Long Distance (ILD) sector and reduced tariffs. Opening of the Internet telephony can impact National Long Distance (NLD) sector also in the same way," TRAI said.

The regulator is seeking comments from the industry on issues that need to be addressed before internet telephony provision is opened, the issues include: examination of interconnection, numbering, lawful interception, emergency number dialing and quality of service.

TRAI data shows that India used 340.96 million minutes of international internet telephony in 2006-07. That number represents growth of greater than 50% year-over-year.