Three domestic providers -- China Telecom, China Unicom and China Jitong -- have been licensed by the ministry of information industry to conduct trials over the next six months. The tariffs indicated by the ministry are: 58 US cents per minute for international calls and 4 US cents per minute for domestic long-distance calls. China Telecom will be starting trials in 25 cities and is resorting to VocalTec's Ensemble Architecture multi-service platform. The service will run on the provider's nationwide-managed IP network, Chinanet.

The Ensemble Architecture includes H.323 compliant gatekeepers, gateways, network management resources and VoIP communications software. It can support thousands of interacting multi-vendor gateways, gatekeepers and servers. The companies areexpected to start commercial services by end this year or early 2000.

The issue is that the Indian government has been humming and hawing about opening up long distance and international telephony, under pressure from the three government-owned telecom players, which want to protect their revenues. However, it appears to have done little research on the impact of the fallout of liberalisation of internet and long distance telephony.

Who says that DoT's, VSNL's and MTNL's traffic, and hence revenues, will fall? And what logic is behind not officially allowing internet telephony when it is already being used by web surfers all over India?

No amount of blocking by VSNL is working as web nerds have found ways around VSNL's blockades. In fact, the trio's voice traffic will actually go up over the medium- to long-term.

While they may lose some share to new entrants, they will be more than compensated by the higher volumes with the lowering of prices which competition will bring. And DoT, VSNL and MTNL willbe able to drop rates a lot more than any new newbie as they have an infrastructure advantage.

As far as voice-over-internet is concerned, they can also enter this segment through their respective internet service arms. The government has been taking steps in the right direction. Leased line rates have come down, though they need to drop further. The Rs 15,000 per telephone line charge, which ISPs had been penalised with earlier this year, has also recently been done away with, removing a heavy burden from potential ISPs.

With only a caretaker government in place, one can't expect any major changes in internet and long distance telephony policies. But it's about time the mandarins of the telecom sector put on their thinking caps and work on planning changes which will prove beneficial not only to the consumer but also to the existing and wannabe telephone players.

Advertising on the Net
Internet advertising is doing very well, thank you. Though it missed the $2 billion target set by TheInternet Advertising Bureau (IAB) for 1998 by just $8 million, it nevertheless recorded a phenomenal growth of 112 per cent over the previous year's figure.

The survey is conducted by the New Media Group of PricewaterhousCoopers and is based on data provided by ad publishers. PricewaterhousCoopers said that internet advertising continued to be buoyant even in the recent quarter showing good growth.

Called the Advertising Revenue Report survey of ad publishers, it was started by the IAB in 1996 and includes data from 200 companies representing more than 1,200 websites. It includes data covering online ad revenues from websites, commercial online services, free e-mail providers and other companies that sell online ads.

The report says that leading ad revenue categories during the fourth quarter were consumer-related (29 per cent), computing (20 per cent), financial services (19 per cent), telecom (eight per cent) and new media (seven per cent). Banner ads cornered 56 per cent of the ads, with sponsorshipsnotching up 30 per cent of the total. E-mail accounted for one per cent, while other forms of advertising chipped in with eight per cent.

While no such survey has been conducted for Indian websites, an estimate is that it could be no more than Rs 25 crore per annum, which places it at a maximum of $6 million. Some may label this a gross overestimate. But considering that so many publications have gone online, that even television sites like the Zee TV and Filmfare awards were webcast and got some sponsorships, and that an increasing number of content sites like Rediff-on-the-Net are catching on, the figures may not be too far off the mark. It's now up to some market research firm to give us an accurate figure.

The writer is the editor of The Indian Cab&Sat Reporter. Feel free to email with your comments to television@vsnl.com or television@hotmail.com