Lower tariffs for broadband from August 1

Tags: News

Leased line bills to be less for companies, banks, individuals

Telecom Regulatory Authority of India (Trai) has slashed domestic bandwidth rates, which is bound to make fixed line broadband tariff cheaper by about 60 per cent.

This will give relief to corporate broadband users like IT companies, business process outsourcing (BPO) firms, banks and e-commerce ventures. These companies use dedicated leased broadband lines for linking up their central offices with branches across the country.

In the case of banks, dedicated leased lines link their branches and even their ATM counters where the fixed broadband connectivity facilitates cash transactions.

Lower bandwidth tariffs will come into effect beginning August 1 this year.

A 2 megabytes per second (mbps) leased line drawn over 500 km will now cost a maximum of Rs 3.4 lakh as against Rs 8.5 lakh per annum earlier. Similarly, a leased line of the same capacity over a 5-km route will cost Rs 12,086 as against Rs 17,016 earlier. Prices have been revised for bandwidth up to 622 mbps.

The reduction in tariffs by Trai applies to point-to-point domestic leased circuits (P2P-DLCs) of capacities ranging from E1 (2 Mbps), DS3 (45 mbps) and STM-1 (155 mbps). Apart from this, this new change has also now brought DLCs from the STM-4 (622 mbps) capacity under tariff regulation.

Domestic leased fixed lines are also used by thousands of internet service providers (ISPs) that offer broadband services. In case the ISPs pass on relief in leased line charges, individual fixed line broadband tariff is bound to be lower.

Bharti Airtel, Reliance Communications and BSNL are some of the major companies that provide leased line connectivity to dedicated users like ISPs, IT companies and e-commerce ventures.Leased lines with broadband capacity of 45 mbps across 500 km will be available at Rs 26.54 lakh as against existing tariff of Rs 61.59 lakh. Similarly, on leased lines over 500 km with capacity of 155 mbps, the tariff has been set at Rs 69.65 lakh as against existing Rs 1.652 crore.

As of March 2014, India has fixed line users totaling 28.59 million.

Out of these, 14.91 million are the broadband users.

While total internet users are set at 165 million, about 140 million subscribers access the internet through their mobile phones, mostly android, that are compatible for heavy data transfers as well.

Owing to competition, Delhi and Mumbai subscribers already enjoy huge discounts on broadband usage via fixed lines. But, in semi-urban and rural areas where there’s hardly any competition, the broadband tariff for corporate customers is bound to see a fall.

State-run BSNL is the biggest fixed line broadband service provider with an over 600,000-km optical fibre network. Several private players have also leased lines from it.

One benefit of lower bandwidth charges is likely to be increase in the penetration in rural areas.

Hemant Joshi, telecom partner at independent consultancy, Deloitte Haskins & Sells said, “Enterprise customers that use point-to-point leased fixed line broadband connectivity will get some relief.”

Adds Rajan S Mathews, director general at Cellular Operators Association of India (CoaI), “This (latest Trai order) has to do with leased circuit pricing and impacts the landline providers. The actual market rates (in metros) have already been discounted and so the Trai tariff will have minimal impact on customers and operators.”

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