In a move that would benefit
big corporate houses, BPO service providers and
Internet Service Providers (ISPs), the Telecom
Regulatory Authority of India (TRAI) recently
reduced prices of domestic leased lines by up
to 70 %.
The ceiling tariff or 64 kbps,
128 kbps, 256 kbps have been reduced by 54 %
to approx. $977 (Rs. 0.44 lakh), approx. $1755
(Rs. 0.79 lakh) and approx. $3022 (Rs. 1.36 lakh)
respectively. Currently, the tariff for 64 kbps
is approx. $2133 (Rs. 0.96 lakh), for 128 kbps
approx. $3822 (Rs. 1.72 lakh) and for 256 kbps
tariff is approx. $3600 (Rs. 2.97 lakh).
Ceiling tariff for E1 (speed
of 2 mbps) has been cut 3 % to approx. $18888
(Rs. 8.50 lakh) from the existing rate of approx.
$19555 (Rs. 8.80 lakh).
Tariff for DS-3 (45 mbps) has
been reduced 67 % at approx. $0.14 mn (Rs.
62 lakh) compared to the existing rate of approx.
$0.41 (Rs. 185 lakh) while for STM-1 (155 mbps)
category, the tariff has been cut 70 % at
approx. $0.14 (Rs. 65 lakh) from the existing
market rate of approx. $1.23 mn (Rs. 554 lakh),
it said.
The ceiling tariff prescribed
by the order will take effect from May 1, 2005.
TRAI will review the situation with regard to
developments in the DLC segment after a year.
Corporate houses and ISPs are main buyers of domestic
leased lines. They have large requirement of transmitting
data. BSNL, MTNL, Reliance, Tata and Bharti are
important providers of domestic leased lines.
The tariffs fixed are in the
nature of ceiling tariffs and operators are at
liberty to offer rates that are lower than the
ceiling fixed by TRAI. This may lead to reduction
in broadband prices by service providers. Further,
rapid technological advances have sharply reduced
the unit cost of long haul bandwidth but the reduction
witnessed in the leased line tariffs has not been
commensurate with reduction witnessed in the cost
of providing the services.
The reduction in the tariff
for leased circuits seen in the market has been
largely restricted to selective routes and in
selective capacities. Thus adding a competitively
priced DLC service was fundamental to increase
broadband penetration in the country.
