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Go-ahead for internet calls - but not Skype

Regulators finally authorised VoIP phone calls but with a catch: only existing licence-holders can offer the service.

Regulators finally authorised Voice over Internet Protocol (VoIP) phone calls yesterday - but with a catch. Only existing licence-holders may offer VoIP, thus excluding popular services such as Skype. The Telecommunications Regulatory Authority (TRA) said it was making it legal for people to place international calls through the internet, but would allow only licensed operators to run such services. The four companies licensed to offer international VoIP services are Etisalat, du and the satellite firms Yahsat and Thuraya.

For consumers, that means the prices of any international internet calls they make will be set by those companies. It is not yet clear whether this will result in substantial cost-savings. Companies such as Skype, who are technically breaking the law by offering VoIP, would have to go into partnership with one of these providers to enter the market. "People look at VoIP as a technology or as a tool," said Mohammed Gheyath, the TRA's executive director of technology development affairs.

"The TRA looks at it as a service. And, as any service, it needs a licence to be provided. This is a mandatory requirement." Steven Hartley, the principal analyst at international telecoms consultancy Ovum, said the ruling was "a step change, not a sea change". "We are not going to see Skype come in and be able to offer services unless they can make an arrangement with the local providers," he said.

Most telecoms companies in the Gulf, fearing the loss of revenues from international phone calls, have opposed allowing access to services such as Skype, which use the internet to provide low-cost telecommunications. Etisalat and du have until now been licensed to offer VoIP services only for domestic calls within the country. Skype recently announced plans to open its first office in the Gulf as part of its effort to end the ban on global internet telephone service in many parts of the region.

Russ Shaw, the vice president of Skype for the Middle East and the general manager of its mobile division, said the office would help the company lobby regional governments and develop partnerships with telecommunications operators. But Raghu Venkataraman, the chief strategy and investments officer for du, ruled out such arrangements. He said the company was looking to launch its own VoIP service this year. "We can launch VoIP but we want to do it ourselves."

Internet-based calls through Skype have been illegal in the UAE since 2004 and the website is blocked, but Skype remains one of the most popular ways for expatriates to communicate with family and friends. Dan Stuart, 36, a Canadian internet entrepreneur in Dubai, said the impact of the ruling on consumers depended on the decisions of the major telecoms firms. "It could be a real cost-saver for people, but it depends on what kind of a payment gateway they introduce," he said. @Email:ngillet@thenational.ae chamilton@thenational.ae

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