VoIP is the new telephone exchange

Illegal gateways exploit cheap Internet-based calls.


November 29, 2010

Voice over Internet Protocol (VoIP), or the ability to make phone calls over the Internet, poses a threatening scenario for existing telecommunication firms across the globe. The fact that in the past year alone the Federal Investigation Agency (FIA), in conjunction with the Pakistan Telecommunication Authority (PTA) has cracked down on over 29 illegal VoIP gateways is a testament to the lure of the business.

The number of registered VoIP gateways, however, is few and far between owing to regulatory hurdles and high licensing fee. The illegal gateways are able to compete in terms of price with large telecoms by avoiding taxation and licensing costs but more importantly, because of the fact that VoIP is far more cost effective for international calls than conventional telephone exchange systems.

If you have ever made a call from Skype or used MSN/Google’s video chat services then you are probably already aware of the cheaper, or even free, calls available through the Internet – not discounting the fact that they boast video as well.

In fact, even smartphones like the iPhone can now be used to make calls through the home WiFi connection which offers free calling to computers and cheap calls to phones, while not tying the caller down to the computer.

VoIP gateway setup

The setup for VoIP gateways exploits cheap Internet-based calls through a fairly simple mechanism. Since calls from one computer to the other are free, these gateways use this ability to connect international gateways to each other.

However, to connect the phone to the Internet, these gateways use thousands of SIM cards to make the connection from the computer to the land line or other mobile phones, thus completing the connection from one phone to another.

VoIP gateways sell their services either through illegal phone cards or they operate in the shadows by offering their services to other legitimate gateways or telecoms. More often than not, these gateways will overload a slow Internet connection with dozens of calls in order to cut costs. This explains the poor call quality on some of the cheaper phone cards.

VoIP-based phone card companies are slowly evaporating as PTA’s collaborations with international partners to locate and identify the offenders have helped reduce the illegal activity. At the same time, larger telecoms also now employ VoIP gateways to offer competitive pricing and marginalise the illegal ones out of the market.

Either way, VoIP is good news for consumers and forward-thinking telecoms.

The writer is heading Online Strategy and Development at Express Media and can be contacted at aleem.bawany@tribune.com.pk

Published in The Express Tribune, November 29th, 2010.

COMMENTS (2)

Haroon Rashid | 13 years ago | Reply The policy by the regulator to de-regulate the VOIP segment. This will change the outlook for FDI in Pakistan which has dried in view of delayed process to de-regulate VOIP. Its an illegal economic threat to the telecom., sectors poor operators. The MOIT is well aware being members of ITU-D. The benefits that will accrue to the people, the sector on the part of the enforcement for regulation will help boost the sector, with stake holder for 3/4G as LTE. What will be the concern of the investors for the LTE as certainly the Chinese Huawei Technologies will put a stake to partner with China Mobile with major stakes in data in China. The enforcement of the regulations. The continuation of enforcement and delay is hurting the sector.
Pakistan One | 13 years ago | Reply If only the government had the sense to determine that they cannot change the digital clock back and instead of resisting, adoption would have pursued, then it would have benefitted not only the national exchequer but the common man as well. It is worthy to knote that the cellular operators are using VOIP to offer the "Ghanta Package" at rock bottom prices. When the cellular service was started in Pakistan no one could imagine about talking hour long for such a meager price, but today it is a reality. In US, UK and several other countires, Telephone operators as well as goverments haev acknowledged that they cannot stop the innovation or restrict the benefits of technology from reaching the common man. Now operators offer not only a fixed line but a second virtual line (VOIP) at nominal rates. I hope that PTA would use it sense (although it is absurd to even imagine that they would do so) and allow VOIP benefits to reach the poor public of Pakistan.
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