TRAI seeks resale of global bandwidth

Bandwith prices would reduce by 20-25 per cent if the Telecom Regulatory Authority of India's (TRAI) move to amend a clause in the International Long Distance (ILD) licence, which prevents re-selling of bandwith in the country, bears fruit.

TRAI has written to the Ministry of Communications and Information Technology urging it to address the issue on a "high priority" basis, stating that such a move would substantially reduce the bandwidth tariff.

The price reduction would not only help bandwidth dependant companies like BPO, telecom and media to compete with global majors but also make India one of the most bandwidth-competitive countries in the world. Current prices in the country are five times more than rates on certain international legs (routes).

The letter, written by TRAI Chairman Nripendra Misra, has sought "suitable amendment" to clause 2.2(a) "" which prevents resale of bandwidth "" of ILD licence. The letter also mentioned that this will help in opening up of the ILD sector by February 2007.

"Such provision could enhance competition in International Private Leaseline Circuits (IPLC) through entry of resellers, who will be non-facility based operators and will be regulated lightly," it said.

The regulator was seeking reselling of IPLC "" a dedicated mode of bandwidth offering "" under ILD services as norms do not permit resale of bandwidth by ILD operators in India. TRAI said irrelevant provisions would help in promoting competition in IPLC segment and result in substantial reduction in IPLC tariffs.

Three submarine cable companies "" Tata group-owned VSNL, Reliance-owned Flag Telecom and Bharti Tele-ventures "" get about 700 GB of bandwidth in India. The bandwidth is resold in the country by internet service providers (ISPs) like Satyam, YouTelecom and Hathway.

According to industry sources, such a move would help in opening up of the bandwidth sector with the entry of new players. The carriers and ISPs will resell bandwidth leading to a fall in the prices. However, they said that ISPs would not be out of business and could co-exist with cable majors.