Announcing this at the economic editors conference held in New Delhi recently, Union Communications Minister Pramod Mahajan said: The question is not whether Internet telephony will affect VSNLs business. The question is whether the people of this country should be provided with new technologies or not. Mahajan said it is not important now to consider what the move will do to the prospects of VSNL divestment. We will tackle all problems at an appropriate hour.

At present, telephony over the Internet is banned in India. The department of telecommunications had asked the Telephone Regulatory Authority of India to formulate guidelines for phasing in of Internet telephony into the country. One of the major benefits of telephony over the Internet is its low cost, said to be lower by almost 40 per cent in comparison to the traditional method.

Nevertheless, the disadvantage is the low quality of voice, a drawback said to be improving gradually. At present the Internet is used to transmit data by what is called the voice over the Internet protocol (VOIP).