The telecom regulator has reduced ceiling tariff for 64 kbps, 128 kbps, 256 kbps by 54 per cent to Rs 0.44 lakh, Rs 0.79 lakh and Rs 1.36 lakh compared to the existing market rate of Rs 0.96 lakh, Rs 1.72 lakh and Rs 2.97 lakh respectively, TRAI said in a release.
The revised ceiling tariff for E1 (speed of 2 mbps) has been cut 3 per cent to Rs 8.50 lakh from the market rate of Rs 8.80 lakh.
Tariff for DS-3 (45 mbps) has been reduced 67 per cent at Rs 62 lakh compared to the existing market rate of Rs 185 lakh while for STM-1 (155 mbps) category, the tariff has been cut 70 per cent at Rs 165 lakh from the existing market rate of Rs 554 lakh, it said.
The ceiling tariff prescribed by the order will take effect from May 1, 2005. TRAI will review the situation with regard to developments in the DLC segment after a year.
Domestic leased circuit is the medium of carriage of data and voice services within the country. The service is provided by basic service operators, unified access service licensees, national long distance operators and infrastructure service providers category II.
The key users of the service in the country are Internet Service Providers, IT and IT-enabled Service Enterprises like BPO units and telecom service providers.
The tariffs fixed are in the nature of ceiling tariffs and operators are at liberty to offer rates that are lower than the ceiling fixed by TRAI. This may lead to reduction in broadband prices by service providers.
While the telecom regulator has cut domestic bandwidth prices, VSNL had earlier challenged its order to reduce international bandwidth prices in telecom tribunal TDSAT.
TRAI said the competition was not fully effective in the provision of DLCs despite more players in the market.
Further, rapid technological advances have sharply reduced the unit cost of long haul bandwidth but the reduction witnessed in the leased line tariffs is not commensurate with reduction witnessed in the cost of providing the services.
The reduction in the tariff for leased circuits seen in the market was largely restricted to selective routes and in selective capacities, it said, adding a competitively priced DLC service was fundamental to increase broadband penetration in the country.