Delhi: The massive cut in international leased line tariffs announced
by the telecom regulator may run into rough weather with the Tata-managed
Videsh Sanchar Nigam Ltd (VSNL) challenging the order with the Telecom Dispute
Settlement Appellate Tribunal (TDSAT).
filed its appeal against the order passed by Telecom Regulatory Authority
of India (TRAI) tariff order on the ground that the move would harm the company's
investments. On March 11, TRAI effected a 70-per cent reduction in international
private leased line circuits (IPLC). It has fixed a ceiling of Rs2.9 crore
a year for a 155-mega-bits-per-second (mbps) line compared with the existing
had said the move would benefit business process outsourcing units, IT-enabled
services and internet services providers who consume large amounts of international
bandwidth. Industry associations, including Nasscom and the Internet Service
Providers Association of India, had been demanding a reduction in tariffs.
VSNL in its appeal, said the end-customer costs should be looked at in the
totality of international, domestic and last mile access pieces. "The
IPLC forms a very small percentage of the total cost structure of broadband,
the IT and the ITeS industry. To focus on the smallest cost component and
squeeze it will have marginal impact. Such a move will aid only BSNL as the
broadband operator," VSNL sources said.
will take up the case on Thursday even as the new rate announced by TRAI is
scheduled to be implemented from April 1. VSNL has questioned TRAI's motive
in regulating the IPLC tariffs since "it has not addressed the critical
issue of unbundling of local loop, which at present is controlled by government
monopoly companies MTNL and BSNL," said a VSNL source.
pointed out that while the IPLC accounted for only 4-5 per cent of the total
costs of Internet service providers, last mile access constitutes 35-50 per
cent of the total cost structure. "If we need to encourage broadband
penetration we need to look at rationalisation
of all key cost components rather than IPLCs, which are the smallest components,"