Net war 8212; VSNL cuts down renewal fees

CHENNAI, MAR 12: Videsh Sanchar Nigam Limited VSNL today announced a discount of 20 per cent on subscription charges for all categories...

CHENNAI, MAR 12: Videsh Sanchar Nigam Limited VSNL today announced a discount of 20 per cent on subscription charges for all categories of internet accounts in a bid to stay ahead of rivals. Customers who renew their accounts with VSNL would now be eligible for the discount, a company release said here.

VSNL has slashed the subscription rate for 100 hours of internet connection to Rs 2,400 from Rs 3,000 and for 250 hours to Rs 5,200 from Rs 6,500.

For 500 hours, the rate was being brought down to Rs 8,000 from the previous fee of Rs 10,000, the release said. However, the renewal discount would not be available in conjunction with other schemes like flexi accounts and for shell and student accounts.

VSNL8217;s flexi hour scheme allows customers to sign up for a low duration account and extend the same on expiry of the duration within a year to a 250 hour or 500 hour by paying the difference in subscription charges.

A cut in the Internet-subscription charges is being proposed, and the issue is likely tobe taken up at the VSNL board meeting to be held later this month. It is learnt that the VSNL management may settle for a 15 per cent cut to bring it on a par with rival Mahanagar Telephone Nigam8217;s MTNL8217;s Internet rates. The logic is that VSNL would not like to spark off a rate war now. The company would rather wait for the private-sector Internet-service providers to do it.

On the other hand, a section of the VSNL top brass is keen to go in more aggressively with a cut of 20 per cent, as this coupled with enhanced service standards could be turn the tables on MTNL, which has made it clear that it will not hesitate to cut charges further. MTNL had launched its services in February with a 15 per cent lower subscription charge than VSNL.

But some engineers of the company feel that rather than going in for rate cuts, VSNL should aggressively market the quality of its services. quot;These officials feel that the service standards are being enhanced and additional features added, all of which are enough for VSNLto retain its market share. Rather than cutting charges, investments should be made in further marketing the services and adding more features,quot; said an official on condition of anonymity.

Story continues below this ad

In a statement issued on Friday, VSNL acting chairman Amitabh Kumar, however, said that the renewal discounts were a step towards VSNL8217;s commitment of providing cost-effective and high-quality Internet services to its customers.