Leased-line internet tariffs set to fall

Rates to be announced this month: Trai

In a move that is bound to bring cheer to corporates, internet service providers, BPOs and software companies, leased-line tariffs in the country are set to witness a significant reduction.

The Telecom Regulatory Authority of India (Trai) has completed the consultation phase and is finalising the revised rates. While declining to specify the date, Telecom Regulatory Authority of India member D P S Seth said, "The revised rates will be announced by the end of the month."

According to the Telecom Regulatory Authority of India executives, the revised rates were drafted after the regulator had compared the existing lease-line prices in various countries, including China, Australia, Singapore, the US and UK.

"A whole list of parameters have been considered as we are aware that there can be no across-the-board comparison with foreign operators," said a Telecom Regulatory Authority of India executive. He however added that studying the international market had a bearing on the revised rates.

"A revision is long overdue. It is a fact that bandwidth rates in India are higher than global prices. Bandwidth rates account for a major component of the input costs for telecom and other service providers. Our information technology (IT) services need to be revised if they are to remain competitive in the global market," said Amitab Singhal, president of the Internet Service Providers Association of India (ISPAI).

The regulator had issued a consultation paper proposing that the leased-line charges be reduced by 70 per cent: the fee for the 64 kbps be brought down from Rs 96,000 per annum to Rs 24,000 (per annum) and that of the 2 mbps line be reduced from Rs 22 lakh to Rs 8.5 lakh.

The state-owned service providers, Bharat Sanchar Nigam Limited and Mahanagar Telephone Nigam Limited, however, fear that a drastic reduction in leased-line charges is likely to make the business of leased lines unviable, apart from eating into their revenues.

BSNL has already replied to the regulator's proposal, and has said the proposed changes "have been made arbitrarily... and are pre-determined without any logical basis".

"We have taken these factors into consideration," was Seth's response to these concerns.