VSNL puts ball in Reliance court to reduce bandwidth prices

VSNL has offered to FLAG, now owned by Reliance, to increase the capacity from the present STMs 1s to 32 STM 1s.

IT companies, call centres and other end-users of bandwidth could look for a hefty cut in charges with VSNL offering the additional capacity at a 40 per cent discount to FLAG within a month of Reliance declaring that it would lower rates by upto 70 per cent if facilities were opened for a fair competition.

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According to sources, VSNL has offered to FLAG, now owned by Reliance, to increase the capacity from the present STMs 1s to 32 STM 1s provided there was bandwidth available on FLAG Europe Asia Cable System for the India Landing Station.

VSNL, the landing signatory, gets around 10 per cent of the amount as Access and Facilitation fees. It is believed that VSNL has offered upto 40 per cent discount on these charges, which translate to four per cent reduction in the total cost of bandwidth, if FLAG passed the discounts, offered by VSNL, to end consumers.

Reliance had earlier offered to reduce the international bandwidth prices by upto 70 per cent provided that bottleneck facilities (landing station, which are currently controlled by VSNL) were opened up for fair competition.

Reliance, earlier this month, is understood to have made the payment to VSNL to get additional bandwidth on FLAG's cables.

The release of bandwidth also witnessed an intervention by Telecom Regulatory Authority of India (TRAI) which said it would intervene if VSNL did not release the bandwidth.