Indian bandwidth rates set to fall more

In a setback to Videsh Sanchar Nigam Ltd, telecom tribunal TDSAT on Monday upheld the TRAI order on reduction of bandwidth prices and asked the regulator to implement the order immediately while dismissing the petition of VSNL.

"We dismiss this appeal and direct that the notification in question be brought into effect immediately by the Telecom Regulatory Authority of India so that the benefit of the notification to the consumer is not delayed. Appeal is dismissed with cost computed at Rs 50,000," the Telecom Dispute Settlement Appellate Tribunal said in the judgement.

The TDSAT order will enable reduction of bandwidth prices of most commonly used capacities by up to 65 per cent and will benefit bulk users like IT and ITeS companies as well as international long distance operators and data centres.

The tribunal also said TRAI is entitled to fix the tariffs under the Act and has followed all due procedure and its ultimate decision is enforceable in law.

Earlier directed by TDSAT, TRAI had carried out TDSAT mandated disclosures with the incumbent operator.

TRAI had fixed a ceiling tariff of international private leased circuit (half circuits) in respect of E-1, DS-3 and STM-1 capacities are Rs 13 lakh (Rs 1.3 million), Rs 1.04 crore (Rs 10.4 million) and Rs 2.99 crore (Rs 29.9 million) per annum, respectively.

These ceiling tariffs fixed result in a reduction of 29 per cent, 64 per cent and 59 per cent in tariffs for E-1, DS-3 and STM-1 capacities, respectively, (as compared to the existing listed price prevalent in the market for the India-USA Atlantic route).

The authority had fixed the ceiling tariffs for three most commonly used capacities -- E-1 (Speed of 2 MBPS), DS-3 (45 MBPS) and STM-1 (155 MBPS).

VSNL had challenged these reductions questioning the methodology adopted by TRAI to arrive at these figures and had also sought disclosure of more data in this regard from TRAI.

TDSAT had asked the regulator to disclose the relevant data with VSNL.

TRAI's main contention was skewed market structure that is detrimental to competition and the services of IPLC are critical to the penetration of broadband/Internet services and to IT and IT-enabled Services.