The Hindu Business Line : Reliance Info to halve IPLC tariffs for full circuits

COMPETITION in the international private leased circuit (IPLC) business in India appears to be hotting up. Reliance Infocomm, which is readying its terabit capacity FALCON network, is believed to have halved IPLC tariffs for "full circuits" in anticipation of selling the capacities that will be available for use in the first quarter of calendar 2006.

Reliance's landing point for the cable is already ready at Versova in Andheri, Mumbai.

According to industry sources, competition in IPLC would enter a new dimension with this. Since these tariffs are for full circuits, the competition would have a bearing on the half-circuit tariff charged by not only Indian international long distance operators such as Bharti and VSNL but also on international operators which commonly offer the "other half-circuit".

Full circuit prices charged by Reliance Infocomm are currently (per annual basis) around Rs 70 lakh for E1 capacity (2 mbps), around Rs 4.27 crore for DS3 (45 mbps) and over Rs 12 crore for STM-1 (155 mbps). These are going to be reduced by more than 50 per cent for consumers, irrespective of the geographies to which the IPLC connectivity is being bought.

Reliance Infocomm officials confirmed that its IPLC rates were going to be halved. The new rates would be around 15 per cent cheaper than existing full circuit rates.

It may be recalled that Telecom Regulatory Authority of India (TRAI) has announced ceilings for half circuit IPLC capacities — at Rs 13 lakh, Rs 1.04 crore and Rs 2.99 crore for 2 mbps, 45 mbps and 155 mbps respectively. But these are for half circuits, which are in the control of the Indian ILDO operators. VSNL, which initially disputed this, has already implemented the new tariff ceilings following a telecom tribunal TDSAT's judgement.But, as Nasscom has pointed out, the other half of the circuit is provided by international players such as AT&T, MCI, BT, Sprint, etc and has not been considered for cost reduction by TRAI. According to the association, "industry information indicates that even today, this amount is higher than that offered by Indian ILDOs. This may be because TRAI has no jurisdiction on these companies."

Even with the ceiling of, say, Rs 12 lakh for an E1 half circuit, full circuit prices for India would be still three times that of the prices say in the Philippines, according to Nasscom. But with Indian players such as Reliance and VSNL now having acquired global networks (FLAG and TGN respectively), the situation is likely to change since they would have control over both legs of the circuit capacities.

Nasscom has already urged TRAI to find a mechanism of bringing these companies to the table, possibly through invitations for a meeting or by encouraging Indian ILDOs to negotiate and talk with their partners in the interests of Indian competitiveness.

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Reliance Info to halve IPLC tariffs for full circuits