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Net Phones Taking Off in the Third World 173

dipfan writes "Internet telephone technology is surging in popularity and starting to make a big dent in telephone revenues in the Third World, for a simple reason: cost. A call from Honduras to the US over the net is just 5 or 10 cents a minute at an internet cafe, compared with $1+ a minute through a telco, reports the Washington Post, which compares the situation to the US where internet telephony "is used mostly by college students and geeks" who have the time and energy to install the software."
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Net Phones Taking Off in the Third World

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  • by chill ( 34294 ) on Friday April 19, 2002 @10:16AM (#3373317) Journal
    Currently the cost of switching equipment to hook up that dark fiber is still outrageous. I may be able to get an unopened FORE Systems OC3 ATM card for my PC off of Ebay for $10, but the telco isn't going to get that price. They need port density, support, reliability, features, etc.

    Cisco, Lucent, Nortel, etc. equipment for high-speed fiber is EXPENSIVE.
  • by mpe ( 36238 ) on Friday April 19, 2002 @10:22AM (#3373349)
    Why are we sending cell phones, a luxury product if ever there was one, to Third World nations

    Because if you are starting from scratch it's a lot easier to set up a telephone system with cellular phones than it is to install lots of cable. It's also a lot quicker and cheaper to get a cellphone system back operational following a major natural disater or war.
  • Re:ABOUT TIME (Score:5, Informative)

    by letxa2000 ( 215841 ) on Friday April 19, 2002 @10:28AM (#3373395)
    Say bye bye telcos.

    That's what I've been saying for years. VoIP, while still definitely in its infancy, is just as much the future undoing of the LD industry as P2P is the undoing of the (current) music industry.

    I hope those third world countries really save enough money from these large first world corporations to make a quality lifestyle change. I hope they take this opportunity to manage their own services and dont let USA bully and sanction and threaten their way into corporate control of the new technologies there.

    I'm an American but currently live in Mexico. I don't know what you're talking about in terms of "these large first world corporations." If you are implying that American telco companies are robbing the poor in third world countries you are sadly mistaken--at least in Mexico.

    Mexico has a terrible telephone monopoly, "Telmex." It historically has terrible quality and their prices are outrageous. It costs about 80 cents per minute for me to call the U.S. but only about 15 or 20 to call from the U.S. to Mexico. And Telmex is entirely a Mexican monopoly.

    In fact, a few years ago the phone monopoly was "broken" by the Mexican government and competition was introduced. Both MCI and AT&T entered the market, and we even have competition in local service in many parts of Monterrey. However, Telmex is still the monopoly. Since most people get their phone lines with Telmex they generally get new subscribers to sign-up for their LD service. AT&T and MCI are at a distinct disadvantage and have even considered leaving the Mexican market because Telmex maintains its monopoly in fact, if not in law.

    As is usually the case, problems in the third world--political and economic--are NOT the fault of the U.S. or other first-world countries. They are almost always the fault of powers closer to home. In this case, telco providers in Latin America make a killing because they either have a government-mandated monopoly, or the government allows competition but silently supports the original monopoly by not encouraging the competition or forcing the monopoly to act in non-monopolistic ways.

  • by mindstrm ( 20013 ) on Friday April 19, 2002 @10:33AM (#3373423)
    Yes, this is true.

    As for more third-world countries and the like... let me assure you....

    Okay, I live in Costa Rica. It's not even third world.. but my internet connection here is more reliable than my phone connection.

  • by letxa2000 ( 215841 ) on Friday April 19, 2002 @10:34AM (#3373433)
    As towards third world countries perhaps the calls are so expensive because maintaining a relibable connection is costly.

    Except in the worst third-world countries (which are technically, "fourth" and "fifth" world countries!), the technology is the same as that found in the U.S.

    The difference is they have crashing monopolies and there is a cultural tendency in Latin America to steal every last "peso" you can. The owners of the telcos pay top government officials so they won't regulate the telcos, and the telco owners and top government officials earn major bucks at the expense of the phone-using public.

    That's why calls are so expensive in Latin America, not because it is any harder to maintain a reliable connection.

  • by jamieo ( 22197 ) on Friday April 19, 2002 @10:49AM (#3373527) Homepage
    I've just come back from spending a month in Nepal, a very poor country with limited telecommunications facilities.

    In the larger cities (Kathmandu, Pokhara) you could call the UK over the internet for about 25-50Rs/minute. Using a traditional phone line costs 125-200Rs/minute. When I was there 10 years previous it was US$5/min!

    The exchange rate is something like 72Rs to US$1.

    The costs are differences aren't as much as this posting said, but it's still quite a saving.

    Personally I shopped around for a cheap real phone call (125-150Rs/min) as the quality was so much better.
  • by Nurlman ( 448649 ) on Friday April 19, 2002 @10:52AM (#3373546)
    I don't know abotu Africa, but in a lot of developing countries, the state-owned telco monopoly is also the gatekeeper of internet connectivity.

    I've had personal experience with the Republic of Palau in the Western Pacific. Palau National Commuinications Corp. owns the phone system, and also runs Palaunet, the only ISP on the island. (Good luck getting another ISP in when PNCC owns the access to the lines.)

    Result: internet telephone calls are prohibited on Palaunet. (It's easy-- watch for bi-directional high-bandwitdth traffic, instead of uni-directional. So simultaneously uploading and downloading on a P2P will get your account a once-over, but that's life in the Third World.) Instead, you're forced to pay the egregiously expensive long distance voice rates.

    Internet telephony only works if you've got an open communications industry. That's not true in a lot of developing countries, where the Government is footing the bill for all infrastructure, and wants to keep control of it for economic or political reasons.
  • by fruey ( 563914 ) on Friday April 19, 2002 @10:59AM (#3373585) Homepage Journal
    All VoIP termination is illegal in Morocco. You are forced in as many ways as possible to not use VoIP over your Internet connection. H323 I think is blocked already, or has been and was removed afterwards.

    VoIP termination is certainly illegal. Even though the phone company, who also have a monopoly on bandwidth, make money whatever you do. They're getting local call rates (Billed at $2 an hour inc taxes), bandwidth money from the ISP, and they still don't want to lose the international telephony deals, where they make ridiculous amounts of money.

    All over Europe, telcos don't want to lose lucrative internation traffic. Real third world countries (rather than emerging economies) have neither enough bandwidth nor the latency required to provide adequate VoIP anyway.

    However bandwidth in Morocco is pretty good. Check out for a site hosted in Morocco with high visits and reasonable serving of pages.

  • by Rogerborg ( 306625 ) on Friday April 19, 2002 @11:13AM (#3373652) Homepage

    Uh, of course, I blinked and missed that residential VoiP is already here []. Yeee ha!

    The TWIF-IP [] adaptor bundled with this service supports two analog 'phones. Whee. Now picture one that'll talk to any DSL or cable uplink, has a 10/100 switched hub supporting 8 IP devices ('phones, PC's, NAS) with a DHCP server built in, that supports 6 analog devices ('phone, fax, trunks), any number of PC screenphones, that has a fully featured call control that provides any service you could imagine (and quite a few that you've never dreamed of), stores 10Gb of voicemail, and supports full RAS services (i.e. you can dial in to your home, then hop out from there, like a mini-ISP), all with a multi-lingual web based front end that you can access locally or remotely over IP or diallup. You want one? You know you do. ;-) You can't get one yet at retail, but give us another 18 months for the telco's to saturate their SME's with these [], and you might see a version hitting retail.

  • Re:Bandwith (Score:3, Informative)

    by duffbeer703 ( 177751 ) on Friday April 19, 2002 @11:14AM (#3373666)
    Not quite.

    The telecoms, in case you haven't noticed, are all in the process of going out of business. Industry giants like AT&T and Global Crossing are beginning the slow slide into bankruptcy and decline.

    Metro optical gear is selling like hotcakes because the equipment allows companies to maintain their network without paying a huge premium to an upstream provider. Why should a firm pay $6000/mo for a connection when you can buy a $50,000 laser that has no monthly cost?

  • Latency (Score:2, Informative)

    by SloppyElvis ( 450156 ) on Friday April 19, 2002 @11:19AM (#3373701)
    In my admittedly limited experience with internet telephony, I have found that latency has been more of a problem than bandwidth. Presumably, your cyber cafes or universities are going to have enough bandwidth to support people using the internet for telephone use. After all, file sharing consumes more bandwidth than streaming voice does, and practically every geek on campus has been exploiting that technology. Compression of telephone-range frequency is good, because the frequency range required is not broad in the general sense of the term. I'm not pretending to be an expert here, but this is the impression I have gathered from my readings (so flame it up, if you have to)

    However, IMHO, I have found it annoying to speak with people over the internet for the reason that the tempo of a conversation is often broken by having to wait for the person on the other side of the line to hear what you just said. I've taken this to be a latency-related issue, but hey I could be mistaken. At any rate, I'll stick with the telephone for now.
  • by vern4of7 ( 262325 ) on Friday April 19, 2002 @11:46AM (#3373860)
    In the US voip is not moving at all at the enterprise level. The carriers got freaked out about started dropping their rates to prevent voip from being used for toll by pass domesticly. It does not provide a cost savings for corporations. If you notices Cisco's story on voip has changed, they are saying that you can reduce staff by having one common network with voice and data, you can reduce head count. There is no mention of the toll by pass.

    Currently medium and larger companies have the ability to negoitate better rates then the residential rates. This is pretty key for preventing/slowing the deployment of voip.

    The only easy savings that you can incurr from voip is conference calls. Most of the conference calling services are .17/min/line in the US. Pretty expensive. Using things like netmeeting or conference bridging features in voip systems you can significantly reduce this cost.

    While in tech circles there is demand for voip, nobody (finance, etc) cares about this technology. These people are just looking at bottom line cost.
  • by Webmoth ( 75878 ) on Friday April 19, 2002 @12:53PM (#3374323) Homepage
    Here in the U.S. internet telephony will probably take quite a while to catch on. Why? Because landline rates are cheap (at least compared to the rest of the world). Also, the quality of American landlines tends to be high, at least better than internet telephony.

    So why is it so cheap? Because of the large installed base. The most expensive part of the infrastructure -- the copper "last mile" -- is already in place, and has been for nearly a hundred years. For the most part, that copper is already paid for. Plus, there is a lot of competition.

    By sake of example, my long distance carrier, Opex [], charges me $0.045/min for interstate and $0.09/min for intrastate calls. International rates are reasonable.

    In third world countries, there isn't a very large installed base. The cost of installing new copper is high, and in many cases equipment is still being paid off. Plus, many countries have telco monopolies that charge whatever they feel like. So naturally, people will turn to promising alternatives such as internet telephony. When I was in Guatemala two years ago, it seemed there were more cell phones than landline phones. Cell towers were everywhere, it seemed. (On a side note, I walked thru a village where the houses were mud huts with no running water... but they had TV's and cell phones... priorities???)

    Summarizing: U.S. landlines are higher quality than internet telephony and at reasonable cost; 3rd world landlines low quality high cost; might as well try VOIP.
  • by atomico ( 162710 ) <miguel DOT cardo AT gmail DOT com> on Friday April 19, 2002 @01:52PM (#3374771) Homepage
    I have always thought that "Third World" is a term coined during the Cold War, when a huge lot of countries which did not want to be aligned either with US-led or with USSR-led countries started a real movement, championed by India, if I am not wrong.

    This was happening in the sixties, when all these countries were immersed in de-colonisation processes. Sadly, what they have in common today is mainly their poverty (but not all of them!).

    In this context, the "First World" were the US allies, while the "Second World" were the Communist countries.

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