Tariff cuts bad news for dial-ups

If the introduction of broadband (256 kbps and above) earlier this year spelt trouble for dial-up Internet in the country, the recent round of tariff reductions for high speed Internet by major service providers may just mark the end of dial-ups.

While the tariff reductions are in place only from August, data complied by the Telecom Regulatory Authority of India (Trai) show that over 60 per cent of subscribers who went in for Internet connections during April-July, chose a broadband connection over dial-up. About 4,00,000 subscribers were added to the internet base during this period.

From just under 50,000 broadband users in India at the beginning of 2005, the number risen to over 4,50,000 by July-end. Besides, the broadband sector has witnessed an average growth of 60 per cent over the last five months.

The decline in dial-up subscriber base has resulted in Videsh Sanchar Nigam Ltd (VSNL),which was the largest Internet provider in India, losing 24 per cent market share during the quarter ended March 2005.

VSNL, which earlier commanded a market share of 70 per cent, has now slipped to fourth spot with a meagre 13 per cent, behind the Chennai-based Sify.

The advent of broadband has also seen over 100 Internet service providers which offered dial-up services being edged out of the market over the last six months. Larger ISPs like Sify have survived as they have ventured into ADSL-based broadband services on copper cables.

A dial-up connection costs an average of Rs 30 per hour. BSNL now provides unlimited broadband access for Rs 250 a month, but with an upload/download limited of 400 MB, while MTNL offers unlimited connectivity at Rs 399 a month and a download limit of 1 GB.

Airtel had recently brought down the tariff for high-speed broadband services to Rs 30 an hour. Besides, the company also offers a night surfing top-up plan, which offers free night surfing at a additional monthly tariff of Rs 49 only.

Additionally, average monthly tariff for a broadband connection in India has witnessed a 75 per cent fall over the last 18 months to touch Rs 450.

The recent tariff reductions will see average monthly tariff fall to Rs 300," said a Trai official.

BSNL has set a target of a million broadband subscribers by 2005-end, to million by the next year and 10 million by 2010, while MTNL has a target of providing 500,000 subscribers by the year-end.

BAND WIDTH

From just under 50,000 broadband users in India at the beginning of 2005, the number rose to over 4,50,000 by July-end

The decline has resulted in VSNL losing 24% market share during the quarter ended March 2005

VSNL, which earlier had 70% market share, has now slipped to fourth spot with 13%, behind Sify.

Over 100 ISPs which offered dial-up service have been edged out

Average monthly tariff for a broadband connection has witnessed a 75% fall over the last 18 months to touch Rs 450