Vsnl Rings In Mci To Hike Net Backbone Capacity

Videsh Sanchar Nigam Ltd (VSNL) has increased the capacity of its international Internet backbone by two-thirds in a deal signed with US telecom carrier MCI. The Indian telecom carriers total international Internet bandwidth has increased to about 60 megabits per second (mbps) following the deal.

Sources said VSNL has leased three 8 mbps circuits from MCI at a monthly rental of about $17,000 per 2 mbps circuit. This marks a 15 per cent drop in rental charges as compared with previous deals. The VSNL-MCI deal is estimated to be worth about $2.45 million (Rs 9.3 crore) a year.

VSNL, which is the largest Internet services provider (ISP) in the country with some 70,000 subscribers, is expanding its international Internet capacity to keep up with the exploding demand for Internet services in India.

 

As per the companys projections, over 200,000 users are to subscribe to its service before the end of fiscal 1998-99.

VSNL plans to further expand Internet capacity from the current 60 mbps by 30-40 mbps, sources added. The ISP is mandated to offer Internet services in the six cities of Mumbai, Delhi, Bangalore, Chennai, Calcutta, Bangalore and Ahmedabad.

Connectivity to the international Internet backbones and Net access points (nerve centres of the networks) are a crucial link in an ISPs architecture and, to a large extent, determine the speed of access to sites. Since an overwhelming majority of Internet sites are in the US, ISPs in other parts of the world have to lease links to American backbones.

VSNL has for some time now been complaining that US carriers overcharge for its leased Internet circuits. As against $3000 per 2 mbps circuit monthly rental for US ISPs, sources said the US carriers charge VSNL about $20,000. This is primarily responsible for the relatively high Internet access prices in India, they added.

Under new Internet access rates introduced on January 1 this year, ISPs are allowed to charge under three tariff slabs. Tariffs for TCP/IP accounts are: Rs 3,000 for 100 hours; Rs 6,500 for 250 hours; and Rs 10,000 for 500 hours. TCP/IP-based Internet services enable viewership of graphics besides text on the Internet. In addition to these usage-slabs, incremental subscription, in steps of 20 hours each, are available at Rs 30 an hour.