Trai may review ceiling tariff for leased lines

"Prevailing Tariff is significantly below the ceiling tariff prescribed by the Authority, particularly on the dense routes. Per unit cost of providing DLC has reduced owing to advancements in the transmission technologies and increased demand particularly on the dense routes," Trai said in the paper 'Review of Tariff for Domestic Leased Circuits'.

All communication services are transmitted on DLC from one telecom operator's network on to the other where different form of communication services like SMS, phone calls, internet are segregated using modern technologies like MPLS-VPN.

"DLCs form crucial building blocks for e-commerce, e-governance, internet access for the masses, BPO, IT and ITES industries. In the financial sector, banks are automating and expanding their branch networks to smaller cities through the use of DLCs," the regulator said.

Trai has fixed April 14 as the last date for written comments on the matter and April 21 for counter-comments. The regulator said it has observed most of the service providers use the ceiling tariffs prescribed by it in 2005 as their base tariff and offer discounts depending on the bandwidth, distance, location and volume of business etc.

"The discounts with respect to the ceiling tariffs are generally much higher on the dense routes," Telecom Regulatory Authority of India said.

The regulator has expressed concern on discounts offered by telecom service providers (TSPs) on DLC service in areas like Jammu & Kashmir, Assam and North East where demand is relatively low.

"The tariff framework for DLC should be such that the tariffs are affordable to the customers and in turn can spur demand from customers. At the same time, there should be sufficient incentive to TSPs for further investment," it said.

Trai said that the old tariff order does not cover modern technologies that have brought efficiency in DLC services and resulted in lowering cost of services.

"...the benefit of reduction in underlying cost is not being passed-on to the customers for those routes and geographic regions in the country where competitive activity is subdued," the regulator said.

Trai has sought public opinion on different approaches that should be used for determining ceiling tariff for DLC service and bringing modern technologies under tariff regime etc.