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VSNL puts ISPs on par with corporates

17-November-2000
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VSNL puts ISPs on par with corporates

Barely three days after announcing a 70 per cent cut in internet leased line tariffs, Videsh Sanchar Nigam (VSNL) has come up with a distinctly less pleasant surprise for ISPs. It has decided to do away with the practice of differential tariffs for ISPs over ordinary corporate customers. ISPs currently enjoy the privilege of a 15 per cent discount on internet lease line tariffs. This incentive will be withdrawn with effect from January 1, 2001, when the revised lower tariffs announced on Monday (November 13) are scheduled to come into force. On Monday, VSNL kicked off a bandwidth war of sorts when its announced a 70 per cent cut in leased line tariffs. A 2 mbps leased line would cost Rs 12.5 lakh per annum from January 1, 2001, against the present rate of Rs 41.8 lakh. For most ISPs, the full ramifications of the VSNL announcement are still not clear. Many are still waiting for some sort of communication, either directly or through advertisements, on the revised tariffs. The reduced tariffs on one hand imply that ISPs can now buy bandwidth at significantly lower rates, but on the other hand could lead to a demand for a corresponding reduction in access rates from customers. This has pushed many an ISP, even leading players like BSES Telecom and Satyam Infoway have turned to corporate services like networking and virtual private networks.

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