VSNL blocking competition: Infocomm

The Reliance Infocomm has accused the Videsh Sanchar Nigam Ltd (VSNL), in which the Tatas hold the majority share, of obstructing attempts to introduce "effective competition" in the international bandwidth market.

In a communication to the Telecom Regulatory Authority of India (Trai), Reliance Infocomm said VSNL's virtual monopoly in the submarine cable landing station was a matter of key concern.

"The lack of competition in the IPLC (international private leased line circuits) segment is primarily owing to the incumbent's (VSNL's) deliberate obstructions and denial of access to its cable landing station by resorting to both price and non-price barrier," Infocomm said in response to a consultation paper on the business.

In its response, VSNL said the regulatory intervention was not required and the bandwidth pricing should be left to market forces as there was sufficient competition. The company said its tariff and non-tariff practices were driven by market forces.

"Based on the available infrastructure, the present IPLC market is witnessing enough competition in India and there is no bottleneck for having access to the capacity available at the cable heads," VSNL said.

Infocomm proposed that the regulator instruct VSNL to share the landing right infrastructure on a non-discriminatory basis.

In the past too, operators have accused VSNL of adopting unfair tactics in sharing infrastructure with them. They have also complained that they are at a disadvantage as they have to pay higher tariffs than those competing in international markets.

Infocomm said the presence of only three players in the IPLC business despite opening up of the international long distance business in 2002 indicated the non-competitive practices of VSNL.

"The effective competition (in the domestic bandwidth business) has been achieved due to the fact that unlike submarine cable facility which lands only at a particular location creating a bottleneck facility, domestic capacity is dispersed across the country and is available from various locations diluting the power of any single party to abuse the control of its facility to the detriment of competition," it added.