The Hindu Business Line : BSNL threatens to discontinue leased line services

BHARAT Sanchar Nigam Ltd has threatened that it would have to discontinue offering leased line services if the telecom regulator forces any further reduction in tariffs.

In its response to the TRAI proposal to reduce leased line tariffs by over 70 per cent, the state-owned company has said that further reduction in rental for a 64 kilo bits per second leased line circuit would make the business unviable, and therefore, it would have no option but to stop offering such services.

According to the consultation paper on domestic leased line tariff, the Telecom Regulatory Authority of India has suggested bringing down the fee for a 64 Kbps line from Rs 96,000 to Rs 24,000 per annum. TRAI has also proposed to bring down the tariff for a 2mbps line from Rs 22 lakh to Rs 8.2 lakh per annum. While BSNL has not raised objection to the reduction in the 2 Mbps category, it has said that the proposed reduction in tariff of 64 Kbps is "wholly unjustified".

If BSNL carries out its threat, it may have an adverse impact on a large number of corporates, which have linked its offices and retail chain through leased lines. BSNL, with over 5-lakh route km of optical fibre cable across the country, is also the largest player in the domestic leased line segment.

"The proposed rental is much lower than the cost based rental as justified by TRAI. Earlier also we had represented that the existing tariff of Rs 96,000 per annum is below cost and there is no incentive for any operator to provide such circuits. The minimum tariff for a 64 Kbps circuit has to be over Rs 28,000," said a senior BSNL official.

In a strongly worded response to TRAI, the telecom company has said, "The changes proposed by TRAI have been made arbitrarily, seems to be pre-determined and without logical basis."

BSNL has also said that the TRAI proposal to reduce the redundancy factor from 50 per cent to 25 per cent would affect the quality of services. Higher the redundancy, higher will be the reliability of the network. BSNL has said that while the TRAI proposal will bring down the cost, it will have a negative impact on services.

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