Domestic bandwidth tariff cut by up to 70%

Long-distance cellular and fixed line rates as well as Internet and broadband service charges might drop as a result of Thursday’s anno...

Long-distance cellular and fixed line rates as well as Internet and broadband service charges might drop as a result of Thursday’s announcement by the Trai on the reduction in domestic bandwidth (domestic leased line) tariff by up to 70 per cent.

On the retail front, cellular, Internet, broadband and fixed-line users would gain. While on the corporate front, BPO companies and other corporate houses would be the major gainers.

Suppliers of domestic bandwidth like BSNL, Bharti, Reliance Infocomm and VSNL could face pressure on margins. A BSNL official confirmed that the company’s profit would be reduced as a result, but refused to quantify the extent of reduction. The BSNL official added that the PSU might approach Trai for a review. An Infocomm source agreed that there would surely be a negative impact on companies offering domestic bandwidth. BSNL is the largest provider of domestic bandwidth followed by Bharti and Reliance.

A Trai official confirmed that the cellular and fixed-line prices would also come down but only in the medium to long-term. The broadband and Internet prices would be the first to see reductions.