Starting today, international bandwidth in the country will be available at 50 per cent the cost. This follows a decision by the telecom regulator to slash cable landing station charges from January 1. The charges for a 10-GB connection, for example, have fallen from Rs 3.4 crore to Rs 6.25 lakh after long-distance players complained of high charges.
The reduced charge would mean lower costs for Internet service providers and long-distance telephony players; this, in turn, could result in lower broadband tariffs.
The biggest gain is for customers of foreign long-distance telephony companies such as AT&T, Cable & Wireless and BT. These players had complained to the Telecom Regulatory Authority of India that cable landing charges were pegged artificially high by Bharti Airtel and Tata Communications. The two Indian companies own most of the landing stations in the country.
According to the foreign players, the fee fixed by the Indian players was much higher than that charged in other countries. A cable landing station is the physical place where the international undersea cable is connected to the domestic network. Usually, cable landing charges account for about 10 per cent of the bandwidth cost, but in India it accounts for over 50 per cent.
TRAI has, therefore, intervened and ordered a steep reduction in the landing charges. “Long-distance operators will pass on the benefits to customers. BPOs and Internet service providers stand to save 50 per cent of their bandwidth cost now,” said one of the foreign players.
Though there are 12 undersea cables, owned by various consortiums and individual players, more than 90 per cent of the landing stations are controlled by Tata Communications and Bharti Airtel. The two Indian players have challenged the TRAI order and are taking legal recourse to stop the reduction in charges.
Other telecom companies that have a stake in under-sea cable networks said the reduction in infrastructure cost will fuel consumption of bandwidth which, in turn, will boost broadband penetration. Telecom players such as BSNL, which has invested in a global cable consortium, will be able to bring more capacities due to lower access charges at the landing stations.
Currently, there are twelve under-sea cables touching Indian shores with a combined designed capacity of 33,900 Gbps. Of this, only about 6,009 Gbps bandwidth is ready to use and the actual bandwidth consumed is only 1,110 Gbps.
Local Internet players said that the regulator should look into domestic bandwidth tariffs also. “Cable landing charges are only one aspect of bandwidth cost. The full benefit to end-consumers will happen only if the tariff for domestic bandwidth is also brought down,” said Rajesh Chharia, President, Internet Service Providers Association of India.