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  3. TRAI reduces ceiling tariff for dedicated broadband lines by up-to 60%

TRAI reduces ceiling tariff for dedicated broadband lines by up-to 60%

16 Jul 2014 Evaluate

In a move that would bring down fixed-line broadband tariffs, the Telecom Regulatory Authority of India (TRAI) has reduced the ceiling rates of dedicated broadband lines, called as DLCs, by up to 60%. The revised tariff regime for domestic leased circuits (DLCs) will come in to effect from 1 August, 2014.

With this, maximum rate, on 2 mbps leased line having length between 5 km to 500 km, called long distance band, will stand reduced from Rs 8.5 lakh per annum to Rs 3.41 lakh per annum. Similarly for leased connection on long distance band having capacity of 45 mbps the new ceiling tariff too has been lowered by 57% to Rs 26.54 lakh from Rs 61.59 lakh per annum, while for 155 mbps new rate has come down to Rs 58 lakh per annum. However, no changes have been made in annual rentals of leased circuit lines having capacity of 622 mbps.

For low distance band which is less than 5 km for 2 mbps line, Trai has reduced ceiling tariff by 29% to Rs 12,086 per annum. In same band, which is less than 50 km for others, ceiling has been lowered on 45 mbps line by 12% to Rs 5.84 lakh and 10% on 155 mbps to Rs 16.1 lakh per annum. 

The real impact of this move would be felt in remote areas, where competition levels are not intense. In cities such as Delhi and Mumbai, leased lines already come with massive discounts, especially for large-volume customers. However, on the routes connecting small cities, remote and hilly areas, the prevailing tariffs for leased circuits continue to remain near the ceiling tariffs prescribed earlier by TRAI.

This move which is unlikely to have any revenue impact on private telecom companies, may hit BSNL, which widely caters to this market, its 600,000 km optical fibre network.

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