Bandwidth tariffs slashed

Some good news. From next month you will need to pay less for high speed internet and international calls. Telecom regulator Trai on Friday...

Some good news. From next month you will need to pay less for high speed internet and international calls.

Telecom regulator Trai on Friday capped international bandwidth tariffs at 35 to 71 per cent lower prices than currently on offer. The cap will be in place with effect from April 1.

This is the first time that Trai has stepped in to regulate international bandwidth prices. The reason, it said, was the lack of competition among international bandwidth providers.

The ceiling applies only to undersea bandwidth, the telecom regulator said, which recently concluded consultations with the industry over international bandwidth costs. The ceiling will be up for review in a year, and does not include satellite-based broadband, which is less prevalent in India, Trai said.

Trai said it would also launch a consultation process to remove bottlenecks in cable landing facilities and enhance competition in the field.

Trai8217;s stepping in may yield a windfall for international callers and BPO outfits, who incur heavy costs for high-speed links.

8216;8216;Effectively, in India, only three operators provide international leased bandwidth service as against 14 in Korea, 24 in France and 32 in Germany and the US,8217;8217; Trai said in its Friday order.

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Trai has noted that market forces failed to regulate submarine cable-based broadband access in India effectively. 8216;8216;The international market for bandwidth has witnessed a deflationary spiral for more than five years8230; This did not happen in India.8217;8217;

For instance, as against 45 per cent CAGR decline in the rentals elsewhere in the world, the decline in India was only at 10 per cent.

8216;8216;It is apparent that this has been due to a lack of competition in the Indian market requiring regulatory intervention,8217;8217; the telecom regulator said, adding it wanted to repeat successes in reducing mobile tariffs in the broadband arena as well.

8216;8216;The growth in demand induced by lower prices being mandated by the authority will itself act as demand stimulant leading to higher utilisation of capacities of operators that would push down prices,8217;8217; it has said.

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The existing ceiling for domestic bandwidth will also be up for review soon.