--- title: "VoIP and IPI issues in Nepal" subject: "Internet and Intranet" chapter: 7 key: "semester_8/internet_and_intranet:voip-ipi-issues-nepal" source: https://www.bctengineer.com/q/semester_8/internet_and_intranet/voip-ipi-issues-nepal site: BCT Engineering --- # VoIP and IPI issues in Nepal Internet and Intranet · Chapter 7: Internet and Intranet Applications - Asked in: 2071 Bhadra, 2+2+6 marks - Answer checked by Claude Opus 5.5 (high effort) on 2026-10-14 - Page: https://www.bctengineer.com/q/semester_8/internet_and_intranet/voip-ipi-issues-nepal - Whole chapter: https://www.bctengineer.com/md/semester_8/internet_and_intranet/chapter-7 ## Question What are VoIP and IP Interconnection? Discuss the economic, administrative and legal issues of VoIP and IP interconnection in Nepal. ## Short answer VoIP transmits voice as IP packets over internet, bypassing circuit-switched networks. IP interconnection links different operators' networks for traffic exchange. In Nepal, economic issues include revenue loss from grey VoIP termination; administrative challenges involve monitoring encrypted traffic and licensing; legal gaps exist for OTT apps, requiring updated policy reform. ## Answer #### VoIP **VoIP (Voice over Internet Protocol)** transmits voice as IP packets over the internet or other IP networks instead of the circuit-switched telephone network. #### IP interconnection **IP interconnection** is the connection between IP networks of different operators or ISPs for exchanging traffic, usually through an Internet Exchange or direct peering and transit, with agreed technical and commercial terms. #### Issues in Nepal The sector is governed by the **Telecommunications Act 2053 (1997)**, Telecommunications Regulation 2054, the Telecommunications Policy 2060 and the **Nepal Telecommunications Authority (NTA)** as regulator, with Nepal Telecom (NTC) as the incumbent. (Rules and licensing terms are updated by NTA from time to time.) **Economic issues** - International incoming calls through the PSTN pay termination and settlement rates; VoIP bypasses these, so the government and licensed operators lose revenue and royalty/tax. - Traditional operators fear loss of voice income, while ISPs and users gain cheaper calls. - Pricing of interconnection and bandwidth (domestic and international) affects whether VoIP is affordable to small ISPs. - Illegal "grey" call termination reduces investment in the network. **Administrative issues** - NTA must monitor traffic, detect illegal VoIP and enforce licence conditions, which is technically hard with encrypted traffic. - Setting rules for interconnection between ISPs and telecom operators, number allocation, and quality of service standards. - Few IXPs and weak coordination between operators; need to maintain call quality and emergency service access. - Administrative capacity for licensing, inspection and handling complaints. **Legal issues** - The Act requires a licence for telephone service. Whether ISPs may offer voice, and whether VoIP is allowed only to licensed service providers, must be clear in law; unlicensed termination is punishable. - Old legislation was written for circuit-switched voice and does not clearly cover new IP services (OTT apps such as Viber, WhatsApp). - Lawful interception, privacy and data protection, emergency calls and number portability rules are incomplete. - Cyber laws (Electronic Transactions Act 2063) deal with crime but not specifically with telephony. - Need policy reform: licensing frameworks for IP telephony, clear interconnection regulation and fair revenue sharing. ## Check yourself The answer's key points as multiple-choice questions, with the correct option and why. 1. What distinguishes VoIP from the traditional telephone service? A. Voice is sent as IP packets over IP networks instead of the circuit-switched network B. Voice is sent over dedicated circuits reserved for each call C. Voice is converted to analog signals before entering the internet D. Voice is sent only through satellite links Answer: A. VoIP carries voice as IP packets over the internet or other IP networks rather than over the circuit-switched telephone network. (Key point: VoIP definition) 2. What is IP interconnection? A. Connecting a computer to its local router B. Connecting IP networks of different operators or ISPs to exchange traffic under agreed technical and commercial terms C. Linking two phones through a PBX D. Assigning IP addresses to subscribers Answer: B. IP interconnection links networks of different operators/ISPs, usually via an IXP or peering/transit, with agreed terms. (Key point: IP interconnection) 3. Why is VoIP an economic concern for the government and licensed operators in Nepal? A. It raises termination rates on incoming calls B. It increases the cost of bandwidth for operators C. It bypasses PSTN termination and settlement rates, so revenue and royalty/tax are lost D. It forces operators to buy new exchanges Answer: C. International incoming calls through VoIP avoid PSTN termination and settlement charges, causing loss of revenue, royalty and tax. (Key point: Economic issue: revenue loss) 4. Which is a legal issue of VoIP in Nepal according to the answer? A. The Act already covers OTT apps like Viber and WhatsApp in detail B. Old legislation was written for circuit-switched voice and does not clearly cover IP services; rules on interception, privacy and number portability are incomplete C. The Electronic Transactions Act 2063 fully regulates telephony D. VoIP is explicitly legal for every ISP without a licence Answer: B. The laws predate IP telephony and leave gaps in interception, privacy, emergency calls and number portability; cyber law does not specifically deal with telephony. (Key point: Legal issues) ## Related in Internet and Intranet - [VoIP and IP interconnection definitions](https://www.bctengineer.com/question.md?key=semester_8%2Finternet_and_intranet%3Avoip-ip-interconnection-define) — Internet and Intranet, chapter 7 - [VoIP and IP interconnection; VoIP operation](https://www.bctengineer.com/question.md?key=semester_8%2Finternet_and_intranet%3Avoip-ip-interconnection-operation) — Internet and Intranet, chapter 7 - [UMS features, VoIP in UMS, IP clearing house](https://www.bctengineer.com/question.md?key=semester_8%2Finternet_and_intranet%3Aums-voip-ipch) — Internet and Intranet, chapter 7 ## Related in other subjects - [Legal provisions for starting a company in Nepal](https://www.bctengineer.com/question.md?key=semester_7%2Fentrepreneurship_development%3Acompany-registration-legal-provisions-nepal) — Entrepreneurship Development, chapter 8 - [Nepal's immediate environmental issues and technology](https://www.bctengineer.com/question.md?key=semester_7%2Ftechnology_environment_and_society%3Anepal-env-issues-technology) — Technology, Environment and Society, chapter 4, asked 2× - [Nepal's environmental issues and global effort](https://www.bctengineer.com/question.md?key=semester_7%2Ftechnology_environment_and_society%3Anepal-env-issues-global-effort) — Technology, Environment and Society, chapter 4 - [Current environmental issues: Nepal vs global](https://www.bctengineer.com/question.md?key=semester_7%2Ftechnology_environment_and_society%3Anepal-vs-global-env-issues) — Technology, Environment and Society, chapter 4