VSNL, MTNL Net tariff cut irks ISPAI

VSNL, MTNL Net tariff cut irks ISPAI
N SHIVAPRIYA

MUMBAI, DEC 25: While Videsh Sanchar Nigam (VSNL) has opposed the recent internet tariff cut by Mahanagar Telephone Nigam Limited, the Internet Service Providers Association of India (ISPAI) has shot off a letter to the regulator calling for an investigation into the tariff cuts effected by both state-owned companies. In a letter to the Telecom Regulatory Authority of India, dated December 9, 1999, the ISPAI has sought justification for the repeated tariff cuts by VSNL and MTNL. "The association and its individual members do not, in-principle, want or seek protection and completely believe in market determined pricing strategies," it said in the letter, expressing concern that they would not be able to reduce tariffs given the existing cost of basic resources.

This is the third such communication on tariff cut by ISPAI to the regulator. The last two were in July and August 1999 when the MTNL dropped rates by 15 per cent. The cut is the steepest this time with MTNL not only dropping tariffs by 15 per cent across all slabs but also introducing unlimited access for the first time in India. Under this plan, users can surf any number of hours for a fixed fee of Rs 6,000 per annum.

The move has also incurred VSNL's wrath because MTNL stands to benefit directly from increased net access in the two metros of Mumbai and Delhi, where it is the leading provider of basic services. VSNL plans to ask for a a share in dial-up access revenue.

The ISPAI, on the other hand, has limited itself to asking the regulator not to approve the new rates unless the price reductions are found to be aligned with the costs. "If the tariffs are approved, MTNL, VSNL and DTS (Department of Telecom Services) may be directed to concurrently extend 18 to 20 per cent reduction to other ISPs for the resources (such as PSTN access lines, international private leased circuits etc)," it said.

MTNL CMD S Rajagoplan has refuted these charges, including those levelled by VSNL, by asserting the new rates were strictly in accordance with the rules of the market and only to benefit customers. "The two (VSNL and MTNL) are independent companies and the government has given us freedom to fix tariffs of our own," he said at a function in Mumbai this week.

The ongoing war between TRAI and MTNL and the verdict of the Delhi High Court staying the CPP regime proposed by the regulator (and opposed by MTNL) has made things more tricky. "There are many lacunae in the TRAI Act. The courts can only interpret the existing laws," said Amitabh Singhal, secretary, ISPAI, implying MTNL may not respond to TRAI's queries. In other words, although, the ISPAI has sent a letter to the TRAI, it does not expect the new tariffs to be reversed or the DTS to reduce infrastructure costs for ISPs. "We don't want to move court since it is a long drawn and expensive process," added Singhal.