Stringent Telecom Regulation – is it good or bad for a country?


Long-distance phone calls become inexpensive after moving away from public switched telephone networks (PSTN) to VoIP. This is because the calls are no more processed over commercial telecommunications line (costlier). Instead, calls are processed over company owned or external internet network (cheaper).

This cheaper option is available in most of the countries around the world. However, the luxury to route VoIP calls using shortest or cheapest possible path is not available in many developing countries due to telecom regulations. These regulations exist in over 50 countries, including India, China, Brazil, Algeria, Bahrain, UAE, etc.

Impact of Telecom Regulation on Call Flows

In this diagram, you can see that a user having DID of New Delhi call circle has to reside in a call manager or SfB pool located in India (security reason), and it must be using a gateway in New Delhi to route outbound or inbound call.

The primary objective of these regulations is to prohibit calls from reaching external destinations via VoiP where local PSTN connectivity (gateway) must have been used to allow telecom companies collect the revenue. Another objective is to maintain national security/legal intercept whenever needed.

A snippet from such regulatory law in India;

SIP Trunks in Regulated Countries

SIP Trunk, usually, is allowed in such regulated countries. However, telecom regulations still need to be complied. Enterprises get dedicated circuit to their premises to have SIP trunking. This IP circuit needs to be completely isolated from WAN circuit to avoid any toll bypass. By the end of day, enterprises must get no objection certificate from the service providers to avoid any penalty by local regulatory authorities.

Observations & Challenges

Challenge in Deploying Next Generation Unified Communications & Contact Centre Topology

These regulatory compliances have proven to be a huge road blocker for enterprises in pursuit of transforming legacy infrastructure to the next generation one. It just doesn’t let enterprises deploy a fine piece of VoIP architecture.

Enterprises having multi-location presence in such regulated countries must undertake some serious administrative effort to stay compliant with toll regulations. It results into administrative issues, regulatory fears, and the compliance overheads.

Innovation Killer – The Biggest Loss!

Telecom regulations have potential to stop the country’s innovation in this domain. Interestingly, regulated countries like India and China have no dearth of developers and innovative mind. Start-ups in these countries are growing at rapid pace. However, almost nothing concrete getting innovated in the field of telecom\VoIP in these regulated countries. Primary reason of this pathetic condition is telecom regulations. Start-ups don't muster courage to be able to sneak into the grey area of regulations where penalty could be detrimental.

OEMs innovating next generation collaboration products avoid setting up their research and development wing as a dynamic lab to support such innovations can’t be deployed in such countries.

It could be easily concluded that although telecom regulations help service providers make some good money… there is a greater cost associated with this compliance. The revenue is generated at the cost of innovation, research and development.

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Telecom Regulations - Challenges & Solutions
Telecommunications - Laws, Regulations and Licenses

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