In the next few months, local telephone companies are expected to embrace the use of Internet technology in delivering voice services to their customers which will translate to much cheaper international long distance (ILD) rates.
The carriers are currently hurting from competition posed by so-called Internet telephone service providers which offer ILD rates at about 80 percent lower than prevailing ones.
Gilbert Paggabao, general manager for service and distribution division of telecom supplier Alcatel Philippines Inc., noted yesterday that traditional carriers should adopt voice over Internet protocol (VoIP) to gain additional revenue and reduce the cost of telecom infrastructure.
In more advanced countries, he said, even the telecom companies and cable television operators already provide such alternative service.
VoIP utilizes IP data connections to exchange voice and fax data that have traditionally been carried over the public switched telephone network (PSTN).
By using VoIP, carriers can realize as much as 50-percent reduction in their network cost.
During the late 1990s, an increasing number of telephone calls have been routed over the Internet, thus, avoiding the normal high ILD charges and making operators lose revenue in the process.
IP telephony is relatively unregulated since there is no way at present for operators to know whether a call is made through the Internet or through the regular means, Paggabao said.
"The government and the telecom firms are currently powerless to prevent the use of VoIP because the technology to distinguished such calls is still in the infancy stage. As a result, the carriers suffer tremendously because they do not earn anything from ILD calls passing through the Internet," he explained.