Internet bandwidth prices have fallen 25-30 per cent from what they were two years ago on mounting competition and falling global prices.

With at least two more submarine cables expected to be lighted up in the next two years, bandwidth prices are slated to dip further.

At present, an STM-1 (155 MBPS connectivity) is being sold at ₹12 lakh to a heavy-volume bandwidth user and for ₹20 lakh to a medium user.

“The reduction in prices is due to the high level of competition in the industry, which is leading telecom companies to sell at a discount. The discounts are given on bulk purchases of bandwidth and it is still expensive for companies making smaller quantity purchases,” said EVS Chakravarthy, You Broadband India Chief Executive Officer.

“However, the prices are not falling as they used to earlier,” Chakravarthy added.

“International bandwidths prices have come down considerably,” Nilotpal Chakravarti, Associate Vice-President at Internet and Mobile Association of India (IAMAI), said. The reduction in prices will help bandwidth-intensive sectors such BPOs, telecom and banking to bring down their Internet and connectivity costs.

Further, it would also help these sectors improve connectivity, enabling them provide better services to customers.

“BPOs were losing the cost-advantage due the high bandwidth prices for the last few years, and every reduction will help them regain their lost presence,” said Asim Abbas, partner at Khaitan & Co.

Internet users are also reaping the benefits. According to a recent IAMAI-IMRB report on mobile Internet, the percentage spent on mobile Internet has gone up to 45 per cent from 43 per cent. The average spend on mobile internet is ₹173 per month.

With the commissioning of new submarine cables, bandwidth prices landing in India are set to fall further. Reliance Communications’ submarine cable unit, Global Cloud Xchange (GCX), is laying a new cable linking Mumbai with Singapore, while the Indian Government has plans to lay a cable between Chennai and Port Blair.

“Globally, the experience is that whenever a new cable is lighted up, bandwidth prices fall. This could hold true for India also,” said GCX Chief Executive Officer, William Barney.

India is serviced by more than 10 submarine cables, including the consortium South-East-Asia Middle-East Western-Europe (SE-ME-WE) series, Tata-Indicom-Chennai cable, BSNL cable, FLAG, Falcon and Bharti Airtel-owned i2i, among others.

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