The Hindu Business Line : Bandwidth rate cut: Too little too late, says ISPAI

Internet Service Providers Association of India (ISPAI) on Thursday said that the reduction in international bandwidth tariffs announced by Tata-managed Videsh Sanchar Nigam Ltd (VSNL) was too late and too little.

ISPs who are the major users of Internet leased lines have been asking VSNL to reduce tariffs for more than a year. The Telecom Regulatory Authority of India (TRAI) also reviewed the matter after ISPs and Business Process Outsourcing companies said that the international bandwidth prices were at a premium.

"While we welcome any reduction in tariff, this is too late and too little. We feel that the TRAI should continue to review the leased line tariffs on a yearly basis to make sure that the rates are such that it will spur broadband usage," said Mr Deepak Maheswari, Secretary, ISPAI.

Some ISPs also said that the actual reduction in tariff may not be as high as 40 per cent as has been announced by VSNL because the existing market tariff are lower than the benchmark bandwidth tariff.

BPO and ITeS companies said that the reduction in tariff will bring down the cost of operations but more needs to be done.

VSNL official, however, said that the price reduction is part of the Tata Group's initiative to support and encourage the globalisation of India Inc. "International connectivity is also an important driver for the growth of the fast growing IT, BPO and KPO sectors. The market for international and Internet bandwidth is expected to expand as the reduced prices will encourage demand from new customer segments like SMEs, smaller ISPs and academic institutions," said a VSNL official.

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