The Hindu Business Line : VSNL hits out at USTR report

Videsh Sanchar Nigam Ltd (VSNL) has strongly objected to a recent United States Trade Representative (USTR) office report that accuses the company of creating artificial shortage of bandwidth and inflating prices, saying that the report does not take into account several submissions made by VSNL on the issue.

"VSNL wishes to lodge an objection against the non-transparent nature of the Section 1377 process. The 2006 report characterises the views of a narrow segment of US operators, yet provides no factual information supporting those views. Conversely, VSNL had submitted data on this topic several times to USTR in written submissions and during face-to-face meetings; yet the 2006 report neither acknowledges VSNL's inputs nor addresses the extent to which these data refute the views of commenting US operators," VSNL said in a letter to the Assistant USTR for industry, market access and telecommunications.

VSNL expressed concern that the 2006 report may be subject to "misinterpretation," particularly by persons in foreign countries, who may not be familiar with the Section 1377 process.

On the US operators' concern about "inflated prices" for international bandwidth in India, VSNL pointed out that the report did not provide any examples of recent price increases. "In fact, VSNL's rates have declined by over 90 per cent since 2000, and active regulation by Indian regulator TRAI of international bandwidth rates since last year should effectively eliminate any concerns about future price inflation," it said.

Refuting the charge that the US operators were concerned about the "artificial shortage of bandwidth," VSNL said, "No such examples of bandwidth shortage is provided ... Together with pre-existing legacy cable systems, there is now more then 18 terabit of design submarine capacity serving India and approximately 500 gigabits of that capacity is lit. Those high capacity cables serve both the eastern and western coasts of India, thereby giving the US carriers the ability to select between diverse routes."

VSNL further contended that given that the total usage of submarine cable capacity in India is about 40 GB, "there is more than sufficient available capacity to serve the needs of all carriers in India for many years to come." On the charge of VSNL being India's dominant international carrier, the company has asserted that there were four different major carriers - VSNL, Bharti, Reliance and BSNL - which have built or are building this year a privately owned high capacity cable serving India.

It estimated that only 35 per cent of international submarine capacity in India passed through a landing station controlled by VSNL and that percentage would continue to decline going forward.

"We request USTR to issue a clarification to its 2006 report incorporating the above mentioned facts, and withdrawing the statements it has made about VSNL," it added.

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