VoIP – The Facts Behind

VoIP is probably the most talked about technological term in Bangladesh in recent years and many industry experts have explained the utility of this technology in different ways trying to justify their claim for opening up this technology to be used by private operators. In this respect Bangladesh Telecommunication Regulatory Commission (BTRC) issued a tender few months back that was stayed by the court and later on the stay order was removed. A high level committee was also formed by the Caretaker Government (CG) to give recommendation on how to deal with this matter and the committee has presented their recommendation to the telecommunication advisor and a policy guideline is supposed to follow soon. Already a number of industry experts have expressed their concerns at the national media on different aspects of the recommendation some of which may not represent the fact and may misguide the policy makers resulting in development of an inappropriate policy that may not benefit the country and its people appropriately. So it is important for all to understand the facts behind in a simpler way.

VoIP (Voice over Internet Protocol) is a terminology that in general represents the technology of transporting voice over an IP network. It does not necessarily mean compressed voice as VoIP can be both uncompressed and compressed. Also it is not the only technology that can compress voice as there are a few other proven technologies available for compression. And in general it is not VoIP that reduces the cost of a call significantly but the compression as it reduces the capacity requirement at expensive backbone significantly for each call. But it is true that VoIP with appropriate compression is the most widely deployed technology now a day in different backbone networks around the world.

In general, use of VoIP is not controlled world wide as a technology. But its uses are limited by the provisions in the license for operating any service by any operator. In most cases the regulators around the world defines the quality of service and requirement for delivering some features like emergency calls, etc. that is to be ensured by any operator within their license provisions and that is applicable not only for VoIP but for any technology to be used by any operator for delivering their service. For example, in Bangladesh the mobile network operators’ license does not allow them to terminate international calls directly but only through Bangladesh Telegraph & Telephone Board (BTTB). So if they use VoIP within their network, say between Dhaka and Chittagong, there should not be any illegal issue with that, although they have to ensure quality of service as per the provision in the license. But if they terminate international calls bypassing BTTB that would be illegal whether or not VoIP is used while doing that. Similarly, Internet Service Providers (ISPs) are not allowed to provide any kind of voice services at all according to their license provisions and as such if they offer voice services by any means, whether local or international, that would be illegal. So it is a service delivery issue and not a technology issue. Moreover, in recent days ISPs are claiming that they are the only logical contender for a VoIP license. The question is does their ISP license allow them to offer voice services. The answer is “no”. So their claim is wrong and they can not offer voice services unless their license terms are changed.

The question remains, “why a VoIP license is required”. It was cited by industry experts that it will allow people to make international calls cheaply. But clearly that was a wrong statement and under the above circumstances the whole process of awarding VoIP license was a wrong concept. If competition is desired in the international calls then it should have been a license to operate international calls by private operators which in general is an international gateway license and not a VoIP license. The question is whether a private gateway license is at all required to reduce cost of international calls or not. In order to reduce cost of international phone calls it is not mandatory to have private gateways as BTTB can reduce their cost by applying appropriate technology which could be VoIP with associated compression and re-fixing their call charges. However, market experience shows that BTTB takes a lot of time to make any changes to meet market demands whether on a policy matter or reducing the tariff or expansion of capacity to accommodate the potential call volume while ensuring quality and unless there is competition they don’t feel the necessity of reducing the tariff or improving the quality. As such private sector participation is important and international gateway license may be offered to private companies. Under this license private companies can be allowed to build international gateway facility where different local telephone network operators, whether mobile or PSTN, and also international operators are to be terminated for making international phone calls from one network to another where VoIP with appropriate compression technology is to be deployed to make calls cheaper.

According to the recent reports at various newspaper and other media it is evident that the high level committee has recommended for enhancement of BTTB network to accommodate market demand for low call charges and also recommended the government to consider opening up the international gateway to independent private sector operators both of which appears to be the right choice under the above circumstances. However, it was also revealed that the committee has also recommended issuing of VoIP license to existing operators as an option, whether mobile or PSTN or ISP, after modifying some terms based on the tender document prepared for the VoIP licensing earlier by BTRC, which does not add any value to this process and instead will create a complex uneven situation in the market. The reasons are basically multi-directional having technical, commercial and legal impacts. Also if VoIP is implemented at the gateway level by the gateway operators it would not leave much benefit to the voice network operators introducing VoIP for the purpose of international calls that in general will increase cost without offering much additional benefit. And the additional license fee will just add more cost to call charges unevenly as the fees has been set differently for different types and sizes of operators. However, if any operator already develops VoIP facility for their nationwide calls the same platform may be used to connect their network with the gateway operators using IP.
Now the question is if the access network operators can also be gateway network operators. Apparently it could be a possibility provided there is a congenial working environment between the operators and also there is appropriate monitoring and control facility available with BTRC ensuring a level playing field for all and more importantly ensuring the customers’ right. But the market has already experienced rivalry between different network operators specially the larger ones taking advantage over the smaller ones on interconnection issues that were not resolved in years until BTRC intervened and put specific deadline to resolve issues. It is very unlikely that these operators will cooperate with each other on the international calls and will take traffic from each other and may introduce tricks like cross subsidy in international calls to take advantage on the overall market that would be almost impossible for BTRC to quantify and control. More importantly the subscribers will not be benefited from the direct competition as the operators may not allow them to select different service providers for their international calls and only option would be to go with their own service provider. So if one operator offers a better rate than the other that will be enjoyed by the subscribers of that particular operator only. In case of independent gateway operators all network operators will be connected to more than one gateway depending on quality of service and prices offered by different gateway operators and subscribers of any network will be allowed to choose between any of these gateway operators as they wish, which is even possible on call by call basis, giving them the full benefit of this service and competition. If any gateway operator does not provide the right level of quality or offers relatively higher price the subscribers will have the choice whether or not to use their services. On the other hand if any gateway operator offers better quality at reasonably higher rate subscribers may still want to use their service due to quality. End of the day it will become a subscribers world while ensuring service providers interest and eliminating scope for monopoly business by any party which are the ultimate objectives of this whole process. Therefore, multiple private gateway operators are better choice for awarding of license.
However, it is important to make sure that all concerned gets the benefit of this new opportunity specifically when it is the access network operators who are creating the scope for initiating and terminating calls. So the network operators who have developed the access network whether PSTN or mobile should get a share of the revenue generated from the calls originated and terminated at their network and as such a revenue sharing arrangement between BTTB, private gateway operators and access network operators would be an ideal solution like what is already happening for the interconnection between different operators for local calls. The license fee should be kept at a reasonable level backed by appropriate market potential analysis ensuring that it helps developing the sector and does not act as a hindrance and major cost increasing factor. BTRC may also keep a small percentage of revenue to cover their operational cost for necessary regulatory works like call monitoring, quality monitoring, etc. but not for making profit as the government is already earning from the private operations having its share through BTTB and also from revenue taxes.

As for the ISPs it is very important first to decide whether they will be allowed to offer voice services or not and if yes then at what terms and conditions so that there is a level playing field between ISPs and other voice network operators. Once a decision is made in favor of the ISPs allowing them to offer international call services to their subscribers then they can also have connectivity to the international gateway operators under the same terms and conditions like the other operators.

Finally, there are other services and applications that may utilize VoIP allowing new business opportunities, increasing employment and scope for increased foreign currency earnings by the country and those should not be kept on hold while making this policy. One such application is call centers that has demonstrated huge revenue potential in neighboring counties like India, Sri Lanka, etc. But as these are specific applications for developing business establishment only and not for the use of general public for making international calls the availability of necessary service at reasonable rate around the country is more important than who should have the right to deliver the service or not. The call centers basically needs international bandwidth that can be an Internet connection or lease line to specific destination or a combination of both depending on specific business case and mostly for incoming calls although there are call centers with outbound call requirement too. These voice circuits are distributed to a large number of operators which may be at a specific location or distributed around a city or even the whole country to different office locations or even household depending on business model. As such it is very important to ensure that these business does not use their facility to terminate calls outside their business requirement that would be illegal and to ensure that, may be some limits on the business model, such as not allowing household to be connected in the call center or limiting the establishment within a city or a single premises etc., to be exercised initially until BTRC is equipped for monitoring operations at any level. Therefore international connectivity to the call centers to be provided only by the gateway operators where the ISPs can carry the bandwidth from the gateway operators to the specific call center location or the call center operators may have their own private link within the BTRC regulations. In this respect majority of the ISPs have already abused their international connectivity for terminating illegal voice calls that some may again do if they are allowed to pass call center voice circuits over their Internet backbone bypassing the voice gateways. As such until BTRC develops the right level of monitoring and control facility it is important that ISPs are not allowed to offer services to call centers using their own backbone but only through the gateway operators whether BTTB or private.

To conclude it is very important that the high level committee for VoIP make detailed assessment of the whole situation and deriving a policy guideline beneficial to the country and its people and does not get confused by the various comments by the industry analysts and technology experts some of whom are trying to give misleading information in the market. However, before finalizing the policy guideline the committee may decide to publish the draft policy for opinion from industry experts that may leave some scope to improve the policy further that will ultimately benefit the country and its people.