The global communications industry is moving at remarkable speed to embrace the new world of Internet Protocol (IP) technology. Underlying economics and the growing demand for data services dictate that networks like the Internet, corporate intranets, and managed extranets will be the telecommunications networks of the future.

Standard communications devices like telephones, fax machines, and voicemail systems are quickly becoming IP-enabled devices that connect to both the existing telephone network and to data networks like the Internet. As IP-enabled communications devices begin to proliferate around the world, a requirement has emerged to integrate the existing addressing scheme of the legacy Public Switched Telephone Network (PSTN) with the emerging addressing schemes of the Internet-Telephony industry. In short, a requirement exists for a directory service that will translate existing legacy telephone numbers into Internet addresses

The underlying need for the ".tel" TLD can be summarized as follows:

There are over 1.2 billion legacy telephone numbers in the world today and the number is growing.
An enormous global investment has been made in training end-users all over the world to use standard legacy telephone numbers to place calls, send faxes, leave voicemail messages, etc.
Unfortunately, IP networks like the Internet, corporate intranets, and managed extranets don't work off of telephone number addressing. Instead, IP networks work off of IP addressing, SMTP addressing, URL's and other non-telephone number formats.
The ".tel" TLD will provide a smooth migration of legacy telephone numbers over to the new world of Internet protocol networks. The smooth transition enabled by the ".tel" TLD is the ability to link telephone numbers to Internet addresses for IP-enabled communications devices so that end-users can continue to use telephone numbers as a common addressing mechanism for both PTSN and Internet services.
It is important to note that the ".tel" TLD will in no way interfere with the existing PSTN structures that create, maintain and distribute legacy telephone numbers all over the world. Rather, the ".tel" TLD will compliment this existing structure by enabling the users of legacy telephone numbers ("subscribers") to register their numbers on the Internet as a valid address for their new IP-enabled communications devices. (IP-phones, PDA's, IP-fax machines, etc.)

Voice over IP example:

IP-enabled PBX (Private Branch Exchange) systems are telephone systems that have the ability to connect calls over both the PSTN and data networks like the public Internet. Major suppliers of IP-PBX systems include 3Com, Cisco, Nortel, Lucent, Ericsson, etc. One of the goals of IP-PBX systems is to provide "least cost routing" for every call placed by an end-user. In the Internet-Telephony world, the true least cost route comes from setting up a call "end-to-end" over the public Internet. The process starts with an end-user picking up a phone and dialing a telephone number. The IP-PBX looks at the number and tries to make a least cost routing decision. The least cost option is to connect the call over the Internet. The higher-cost back up is to send the call out over the existing telephone network (PSTN). In order to send a call out over the Internet the IP-PBX needs to check a global directory to determine if the telephone number can be translated into an Internet address for an IP-PBX or IP-phone at the distant end.

The ".tel" TLD is the top-tier of a globally distributed directory solution that enables end-users to register their phone numbers on the Internet and associate those phone numbers with any number of IP-enabled communications devices (phone, fax, e-mail, PDA, etc.) As the top-tier of the global system, the ".tel" TLD simply provides a pointer to the appropriate location where authoritative Internet address information is stored for a given number. For simplicity, only the top-tier of the directory is shown in this example.