NEW DELHI - The government Monday referred back the Internet telephony issue to the telecom regulator even while providing flexibility to calling card customers, official sources said.

Internet telephony, if approved, will allow consumers to make calls from their personal computers or laptops to fixed lines or mobile phones in India or abroad. They could also make a call to personal computers from their mobile handsets.

Internet Telephone will help consumers make STD calls for as cheap as 10-40 paise per minute, apart from making free local calls from their computers or mobiles or fixed lines.

A Department of Telecommunication (DoT) official confirmed that the net telephony issue has been referred to the regulator, Telecom Authority of India (TRAI).

'It was certain that the net telephony issue would be delayed by the government,' added Naresh Ajwani, secretary of the Internet Service Providers Association of India, a trade forum.

According to industry sources, the issue is ticklish as allowing net telephony implies eating into the revenues of telecom operators.

The government, however, has accepted the proposal for calling cards, which would mean allowing subscribers to choose their carrier for making long-distance calls whether domestic or international (STD and ISD).

This implies that a Vodafone subscriber can buy a prepaid long distance package from any other telecom service provider like the state-owned BSNL for a particular period.

The customer is required to punch in a set of numbers specified on the calling card to get on the BSNL network and make calls.