The Telecom Regulatory Authority of India (TRAI) has finally taken notice of the country's Internet Service Providers (ISPs) who for long now have been demanding opening up of Internet telephony so that they can go head-to-head with telecom service providers -- at least on the long-distance services front.

The regulator on Monday issued a consultation paper seeking industry views on whether ISPs should be permitted Internet telephony (voice over Internet protocol or VoIP) services to fixed-line and mobile phone connections within the country.

The country's existing laws do not permit ISPs to offer VoIP services to landlines and mobile phones. By contrast, all telecom service providers including Bharti Airtel and Vodafone Essar are allowed to offer VoIP services -- even to fixed-line and mobile phone connections. While all telcos are permitted full Internet telephony services, it's only state-owned MTNL (Mahanagar Telephone Nigam Limited) that has succeeded in offering these services in two metros of the country, namely Mumbai and Delhi.

ISPs are of the view that a majority of telcos have failed to implement Internet telephony services because they fear these would eat into their revenues. They argue that as opposed to existing laws, if they were indeed allowed to launch full-fledged Internet telephony services, they would be able to offer ISD at as low as Re 1 per minute, STD at less than 50 paise per minute, and local calls between just 10 and 15 paise per minute. Which happens to be a fraction of the cost offered by large telcos for similar services.