VSNL slashes bandwidth tariffs by another 45%

Videsh Sanchar Nigam Ltd (VSNL) has reduced bandwidth tariffs by over 45 per cent on its wholly owned Tata Indicom Singapore Chennai Cable (TIC).

The tariff cut, effective August 15, will benefit over 3,000 international private line circuit (IPLC) customers of the Tata group-controlled company.

This is VSNL's sixth tariff cut in the last four years. The cuts will go a long way towards helping Indian BPO, information technology and ITeS firms, and call centres, to competitively price their services and offerings in the global market. Bandwidth is an essential commodity for BPO companies.

After the cut, the charges for a half-circuit IPLC have fallen from Rs 40 lakh to Rs 11 lakh for E-1 (2 mbps connectivity), from Rs 7.25 crore to Rs 1.14 crore for DS3 (45 mbps) and from Rs 21 crore to Rs 3.30 crore for STM-1s (155 mbps), according to a VSNL release.

The tariffs are for restorable capacities between India and the US, and was effected after the commencement of TIC in November 2004 and the acquisition of Tyco Global Network, acquired last year.

The IPLC prices will drastically fall at the India leg, benefiting data-based BPO majors, enterprises, international carriers and corporates among others.

This would help them increase profit margins, as these companies were reeling under the effect of high bandwidth charges and employee salaries, industry sources pointed out. It is not known whether these companies will pass on the benefit to their clients, mostly foreign firms.

Over the past six months, VSNL reduced international bandwidth prices between India and the US by 48 per cent and that between India and Singapore by 50 per cent.

Half-circuit tariffs on the India-US route on TIC have been halved to Rs 4.21 crore per annum for an STM-1 mode (155 MB connectivity). The comparable figures on consortium cables were around Rs 8 crore per annum, VSNL informed the Telecom Regulatory Authority of India.

Bandwidth prices between India and Singapore have also been reduced by around 50 per cent, with an STM-1 connection priced at Rs 3.76 crore per annum, against Rs 6.57 crore being offered by the consortium cables.