Low cost Internet phone revolution beckons for India

NEW DELHI, August 23, 2008 (AFP) – Battle lines are being drawn after India’s telecoms regulator called for full-blown telephone services via the Internet, paving the way for another fall in the nation’s already cheap call rates.

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India’s Internet service providers (ISPs) are delighted at the prospect of a new revenue stream but fixed line and mobile players are objecting that they paid high market entry fees, whereas ISPs will not have to stump up any money.

Under the plan proposed this week by the Telecom Regulatory Authority of India, people could call from their personal computers with Internet connections to a landline or a mobile phone and vice versa.

The move could ring in another big drop in calling prices in the world’s fastest-growing phone market, where consumers already enjoy some of the lowest telephone costs, the regulator said.

The proposal is aimed at putting India’s telecom sector “in tune with global trends” in which such “Internet-based services are very popular” and boosting paltry broadband penetration, the regulator added.

The government is keen t