There are two types of telugu fonts ASCII and Unicode. There are lot of telugu fonts available in ASCII and Unicode format. Some of them are Proprietary and some of the telugu.fonts are released using GNU/GPL License.
Telugu Fonts ASCII
Lot of Telugu ASCII fonts are available. Most of the fonts are Proprietary. Each telugu font use custom telugu keyboard layouts. To type in telugu.a user need to learn these layouts also. To read various telugu text an average user need to install all these telugu fonts.
Telugu Unicode Fonts
Most of the unicode telugu fonts are released under GPL license. You can download them free of cost and use them. The Unicode fonts are presented with common keyboard layout called Inscript. Some of the telugu fonts are listed below.
Download Telugu Fonts - Open Type Unicode Compatable Telugu fonts for Windows and Linux
Download Akshar Unicode Font (Akshar.ttf)
Source: Free download from Kamban Software.
Stats: Version 0.07 December 23, 2004 has 1,751 glyphs and no kerning pairs
Support: Devanagari, Kannada, Latin, Malayalam, Tamil, Telugu
OpenType Layout Tables: Devanagari, Kannada, Malayalam (old style), Sinhala, Tamil, Telugu
Download Pothana2000 Telugu Font
(Pothana2000.ttf from Pothana2k-95.zip or Pothana2k.zip)
Source: Free download from the Kavya-nandanam website.
Stats: Version 1.0 has 632 glyphs and 3 kerning pairs
OpenType Layout Tables: Telugu
Download Telugu Fonts from Kamban Software