Bhaskar Hazarika
Global long-distance carriers BT, AT&T and Cable & Wireless have sought the intervention of Telecom Regulatory Authority of India (Trai) to create a wholesale bandwidth-pricing regime to regulate “the higher bandwidth prices in the country.”
These global operators petitioned the telecom regulator, arguing that a wholesale pricing regime would cut down bandwidth cost for the end-consumer. Apart from these global long distance carriers, Indian operators like Sify, Spectranet, and RailTel, too are in the bandwidth retail business.
There are nine submarine cable networks that offer the bandwidth to long distance carriers here. Tata Communications (formerly know as Videsh Sanchar Nigam) owns five submarine cables, Bharti has two, Reliance Communications one and the consortium of Bharti and Reliance owns another network. Long distance carriers like BT, AT&T buy bulk of bandwidth from these wholesale vendors and further retail it to end-consumers.
A senior Trai official, who did not wish to be identified, told Financial Chronicle that the global carriers had written to the regulator to set up a wholesale pricing regime. “At present, we have a retail pricing on bandwidth but there is no regulation on the wholesale pricing. The regulator is looking at the recommendations made by the carriers on the wholesale pricing,” he added. He said the “bandwidth prices in India today was $5-9 million per 10 gigabytes compared to $1.5-1.7 million in other countries in Asia.”
An email sent to Tata Communications went unanswered.Commenting on the need for a wholesale pricing regime, former Trai advisor, S N Gupta, said, “Once the regulation on the wholesale pricing is done, service-based competition will increase leading to a cut in prices. Asked if the entry of new vendors would ease the pricing, he said entry of new players would not bring competition in this space but would only increase the capacity.
Asia’s privately-owned submarine cable network, Pacnet, is another player, which is setting up a submarine cable network in India under the West Asia Crossing (WAC) project. With the entry of the new player, there will be 10 cable networks in the country.
© Financial Chronicle
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