ISPs up in arms against MTNL Net rate cut

According to senior industry sources, the ISPs will ask for a corresponding drop (15 per cent) in prices of infrastructure like ISDN, PSTN and leased lines which are being offered by MTNL in Mumbai and Delhi. "Private ISPs have to pay high infrastructure costs to DoT and MTNL. The question is: are they charging themselves the same money?" asked a leading private ISP.

The ISPs, which did not raise any objections when MTNL initially entered the market at a 15 per cent discount, said they were "now beginning to feel the pinch". "The last time we attributed it to market dynamics. But now that it is happening so frequently and only with MTNL — there is no harm in getting it investigated," said Amitabh Singhal, secretary, ISPAI.

"MTNL’s decision to further reduce prices for internet is monopolistic and unfair being the only basic service provider. They should be willing to reduce the charges of leased and E1/R2 lines etc, provided to ISPs accordingly to provide a level playing field," the ISPAI said in an e-mail response to The Indian Express.

It further added that, unlike private ISPs, Videsh Sanchar Nigam Limited would be in a position to absorb these rate reductions comfortably and compete with MTNL because it was the sole international carrier.

This is not the first time ISPs have expressed doubts about having to compete with organisations who also control resources. The VSNL had early this year announced its internet services would be transferred to a separate subsidiary in response to these apprehensions. However, ISPs continue to be sceptical with the association saying it remained to be seen if the subsidiary would be liable to make the kind of payments for ports and IPLCs as other ISPs are obliged to.

In its representation to the TRAI, the ISPAI will also ask for a downward revision in the tariff of GEMS 400 services being offered by VSNL. The GEMS 400 is a gateway service which is being used by many ISPs — including Wipro, Satyam and Global — which were earlier e-mail service providers.

According to Singhal, the ISPs had already approached VSNL on this three months back. "But VSNL has been dodging the matter by replying that they are considering the matter," he said. The demand for reduction in GEMS 400 tariffs comes in the wake of ISD rates and the port charges coming down by 40 per cent to 50 per cent as per TRAI recommendations.