Cheaper bandwidth to trim Internet rates

By : |November 15, 2000 0

NEW DELHI: Indian Internet customers can look forward to a further cut in
access rates because of cheaper bandwidth costs.

State-controlled Videsh Sanchar Nigam Ltd (VSNL), India’s main Internet
service provider (ISP) and international bandwidth supplier, announced a steep
cut in leased line charges on Monday, setting the ground for what could be a new
fare war.

"We believe that this is a very good thing for the industry in general.
It is a positive step and would overall bring down the prices and accelerate
growth," David Appasamy, spokesman for Satyam Infoway, India’s leading
private sector ISP, told Reuters on Wednesday.

He said the details were being worked out by ISPs, and the exact amount of
the price cut would depend on individual strategies of companies. The price cuts
could be announced any time in the next few weeks.

Most Indian ISPs now charge roughly Rs 3,500 ($75) to Rs 4,500 a year for
unlimited dial-up access, but the customers must pay the telephone charges. A
handful of free ISPs rely on advertisements to provide access to customers.

VSNL said on Monday it proposed to cut rentals for private international
leased circuits by about 75 per cent and leased Internet lines by about 70 per
cent with effect from January.

Atul Kunwar, chief executive officer of Mantra Online, an Internet venture
involving India’s Bharti group and British Telecom, said VSNL’s cuts would go a
long way.

"Reducing the cost of bandwidth access is a logical step to promote the
quality of Internet connectivity in the country in line with international
standards," Kunwar said in a statement.

Appasamy said information technology-enabled services like call centers will
also gain from the VSNL measure. He said Satyam, which is also building its own
international gateway, was not adversely affected as a bandwidth supplier.

"We believe that a mix of bandwidth providers will spread our risks. Our
bandwidth comes from VSNL, MCI Worldcom and satellite gateways," he said.

(C) Reuters Limited 2000.

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