Over the last one month, the Telecom Regulatory Authority of India (TRAI) has had a run-in with the Telecom Disputes Settlement and Appellate Tribunal (TDSAT) on two separate accounts.
First, the tribunal revoked TRAI’s order reducing international bandwidth prices by up to 70 per cent. Second, it set aside a 2003 TRAI order, which allowed service providers to establish direct connectivity between networks.
In the first instance, TDSAT has set aside the TRAI order on international bandwidth prices, which was to have come into effect from April 1, 2005. In fact, it has asked TRAI to relook at the entire exercise and share the full facts and basis of calculation with Videsh Sanchar Nigam Limited (VSNL).
The tariff order was issued by TRAI in March, fixing a tariff ceiling for the three most commonly used capacities/speed ?? E1 (2 Mbps), DS-3 (45 Mbps) and STM-1 (155 Mbps) ?? at Rs 1.3 million, Rs 10.4 million and Rs 29.9 million respectively per annum for international private leased circuits (IPLC) half circuit. The new tariffs would amount to a tariff reduction of 35 per cent, 71 per cent and 70 per cent for E1, DS-3 and STM-1 respectively over the existing listed price.
But VSNL, a major bandwidth provider, challenged the order before the TDSAT, stating that international bandwidth prices could not be looked at in isolation. It questioned TRAI’s methodology in arriving at the price ceilings and pointed out that the ceilings were way below costs.
TRAI says it will have to look at the TDSAT order before taking action. Meanwhile, it maintains that its rationale for lowering bandwidth prices was that it would help increase internet and broadband penetration in the country.
Needless to say, this move has come as a major setback to IT-enabled service providers and private ISPs ?? the biggest users of international bandwidth. While it may seem unwarranted, since international bandwidth tariffs in India are much higher than global rates, the case has got caught in technicality.
The other order withheld by TDSAT within the same week is the TRAI directive allowing interconnectivity between networks of different service providers (primarily between basic and cellular operators) through mutual agreement. BSNL challenged the order, contending that TRAI did not have the jurisdiction to do so and that it was outside the purview of the licence agreements signed by basic and cellular operators. “There was no justification for direct connectivity, which would cause technical difficulties and harm the quality of service,” said BSNL officials.
While TDSAT has set aside TRAI’s directive, stating that it did not have the authority to override the licence conditions and make direct connectivity mandatory, it has directed BSNL to “stop charging Re 0.19 from cellular operators by way of transit charges for accessing its CellOne subscribers”. This has been done in order to ensure a level playing field.
For BSNL, this would mean incurring a loss as it has been charging Re 0.19 from cellular users for transiting calls. While this was acceptable for terminating cellular calls on BSNL’s PSTN network, it was not seen as justified for accessing BSNL’s CellOne subscribers given that cellular operators already pay port charges to BSNL. Also, CellOne has been benefiting from connectivity to other cellular operators without paying any PSTN transit charges while making use of the existing ports.
While TDSAT has objected to the TRAI order, it agrees that, in the long run, since both cellular operators and BSNL are likely to enhance their capacities, the present connectivity would fall short of the requirements. Thus, in the interest of a level playing field, direct connectivity between cellular operators and BSNL through mutual agreement ought to be encouraged in the long term.
