Friday, March 11 2005 17:19 Hrs (IST) - World Time -

New Delhi: Telecom regulator, Telecom Regulatory Authority of India (TRAI) today (Mar11, 2005) announced a major reduction in the international bandwidth prices by upto 70 per cent and as a result ISD tariffs may come down besides reduction in tariffs of Internet and broadband services.

According to TRAI the ceiling tariff for International Private Leased Circuit (IPLC) half-circuit in respect of E1, DS3 and STM-1 capacities are Rs 13 lakh, Rs 104 lakh and Rs 299 lakh a year respectively.

Operators would be free to offer tariffs that are lower than the ceiling tariff fixed by the Authority.

International bandwidth is the medium of carriage of data and voice services across countries in the world. The main users of IPLC in India are Internet Service Providers, IT and IT-enabled service enterprises like Business Process Outsourcing Units and ILD operators.

By issuing a Telecommunication Tariff Order (TTO), for the first time the Authority is regulating the tariff for International Bandwidth.

The ceiling tariffs prescribed by this order would come into effect from April 1, 2005.

The IPLC leased rentals or charges for using the services of the international leased circuits were found to be higher in India than in many countries owing to lack of effective competition in the market, TRAI said.

India had only three operators, as against 14 in Korea, 24 in France and 32 in USA. The Authority found that it was essential to make this key input available to various economic and social activities at a competitive price because the market forces were not effective.

"A competitively priced IPLC service is fundamental to achieve a higher rate of penetration of Broad Band in the country, which provides a basis for fundamentally transferring the socio-economic opportunities, particularly in rural India," TRAI said in the statement.

TRAI said that the prescribed ceiling tariff would be applicable for all destinations, capacities and types of cable systems used for carrying either voice or data.

The tariff for capacity /speed below E1 and IPLC offered through satellite media have been kept under forbearance for the market forces to determine their tariffs.