Dismissing Videsh Sanchar Nigam Limited’s (VSNL) petition challenging TRAI’s amendment to the Telecommunication Tariff Order (TTO), fixing ceiling tariffs for international private leased circuits (IPLCs), TDSAT has asked the regulator to implement the lower bandwidth prices immediately. “We direct that the notification is brought into effect immediately by TRAI so that the benefits to consumers are not delayed. VSNL’s appeal is dismissed with cost computed at Rs 50,000,” the TDSAT order stated.
Further, in reference to VSNL’s contention that TRAI had reduced tariffs by almost 70 per cent based on inaccurate cost estimates, the tribunal stated that TRAI was entitled to fix tariffs under the TRAI Act, and that its decision was “enforceable by law”.
A quick and unequivocal stand by TDSAT was imperative given that bandwidth prices in India are much higher than global prices, which has skewed the market structure. Moreover, IPLC rates are critical to increasing broadband/internet penetration in the country.
The TDSAT order is good news for TRAI. Twice earlier the same recommendations have been challenged by VSNL, delaying implementation by a year.
TRAI had fixed ceiling tariffs for three most commonly used capacities ?? E-1 (speed of 2 Mbps), DS-3 (speed of 45 Mbps) and STM-1 (speed of 155 Mbps) ?? in its 39th amendment to the TTO. The ceiling tariff for IPLC (half circuit) in respect of E-1, DS-3 and STM-1 capacities are Rs 1.3 million, Rs 10.4 million and Rs 29.9 million per annum, respectively.
The TDSAT order will effectively mean a reduction in tariffs by 29 per cent, 64 per cent and 59 per cent for E-1, DS3 and STM-1 capacities respectively (compared to the existing listed price prevalent in the market for India-USA). This will benefit both bulk users as well as international long distance operators who have been asking for tariff cuts for a long time.
