Skype calls not a threat to voice telephony: CARE

Says quality issues of calls over the Internet might deter many users from trying it

In the immediate future, voice calls made over the Internet like on Skype, will not be a serious threat to the revenues, according to a report by rating agency, CARE.

The report's observations are based on cost calculations. A Skype-to-Skype call consumes 375 per kilobyte per minute. For two users, the total data usage comes to 750 KB/min. "At an average data realisation rate of 35 paise per MB, it translates into 26 paisa per minute as the cost of a voice call on voice over Internet (VoIP). If we compare this with average realisation per minute of 40 paisa per minute for voice calls, VoIP using OTT apps translates into a discount of 35% to regular voice calls," the report says.

Practically, however, the discount comes with many conditions. The first one of them being regulatory hurdles. The government limited VoIP calls only to international calls so far. Telecom operators are likely to oppose opening it for domestic voice telephony. "It will face strong opposition from the telecom operators who have invested billions of Dollars in the network," CARE said.

Added to that quality issues of calls over the Internet might deter many users from trying it. There is a latency of 1-2 seconds, blank spots and call drops. "3G network in India, especially indoor, is patchy and quality of calls further deteriorates on 2G," the report commented. Calling over the Internet is also more popular in countries which have unlimited data packs, unlike in India, where data usage can be checked and controlled. Lack of penetration of smartphone users will also act a deterrent for the widespread use of such applications.

"As the differential between voice call tariff and data tariff of a call on VoIP, operators would not lose much of their revenue even if some portion of the voice telephony shifts to VoIP. Though it is not a threat to broader voice telephony in the immediate future, voice calls over Internet is expected to threaten national and international long distance telephony because of the tariff arbitrage," CARE said.