VSNL slashes leased line tariffs by 75

The rates for two Mbps internet leased line have been slashed by 70 per cent to Rs 12.5 lakh from Rs 41.8 lakh earlier. Corresponding rates for two Mbps international private leased circuits link will now be Rs 40 lakh, a reduction of 76 per cent from the Rs 163.68 lakh earlier on optical fibre cable to US, a VSNL statement said.

8220;The VSNL move will lead to further cut in internet rates for the common internet consumers and is a big help for corporate clients who are leasing lines from VSNL on a long-term basis,8221; says an industry analyst.

VSNL, which will lose its monopoly as an international telephony service provider by 2002, has streamlined tariff structure by removing disparities between rates for Europe and US, rationalising it into a unified structure for all customers. 8220;The competition will find it very difficult to match VSNL8217;s tariff structure once the industry is opened up,8221; says a telecom analyst.

The new tariff structure also includes a commitment discount whereby customers get progressive discounts based on commitment.

For IPLC, the discount varies from 10 per cent on two years commitment to 25 per cent on five years commitment. On internet leased lines, the discount is five and 20 per cent on two and five years commitment respectively, the statement added.

The reduction on tariffs by VSNL at the fibre heads at Mumbai and Cochin is reflective of the falling procurement prices via Sea-Me-WE3 optical fibre cable. The tariff reduction is aimed at stimulating demand in the Indian market, VSNL said.

VSNL has already initiated the process of procurement of additional international bandwidth in advance of the growth in usage anticipated in 2001.

As per VSNL8217;s operation bandwidth plan, all international and internet leased lines are provided within 60 to 90 days of the application depending on the leased line speed. All capacities up to 2 Mbps are provided within 60 days and above 2 Mbps in 90 days subject to availability of local lines.

The present price reduction follows a 50 per cent price cut in January this year whereby prices of IPLC were also reduced by 50 per cent for ISPs and 25 per cent for general category of customers.

In the first half of 2000-01, VSNL witnessed a sharp growth in the usage of internet leased lines and IPLC leased lines. Its revenue from internet has gone up to Rs 129.3 crore in the first half ended September 30, 2000. This happened despite a steep cut in internet tariffs during the same period. The number of leased lines 64 Kbps and equivalent stood at 2,937, a growth of 110 per cent from 1,393 leased lines in the corresponding period last year.