The ISP Association of India President Amitabh Singal told The Financial Express that "it is a pro-active step from VSNL". Along with the new tariff, the company has kept the minimum period of commitment for the leased lines at one year in order to wean away customers from the bandwidth auction companies which promise to offer bandwidth at highly competitive prices. As per the new tariff rules, customers will be required to make an advanced payment for two quarters and a 20 per cent rolling advance for leased line commissioning. VSNL, however, has also offered for the first time a `commitment discount' whereby customers get progressive discounts based on commitment. The ISP has also introduced Indefeasible Right of Use (IRU) pricing wherein customers can buy a high-speed link for the life of the cable with a lumpsum payment. Along with the reduction in leased line tariff, VSNL has also announced a streamlining of tariffs whereby a single tariff would become applicable worldwide and to all customers.

In India, no other firm offers fibre optic leased lines, but the companies who are offering international bandwidth through satellite such as Loral Orion and New Sky Satellites have already announced their decision to offer the most cheap bandwidth in India.

New Sky Satellite who had stuck business for $6 million in India has last week signed an agreement with Satyam Infoway, the largest private ISP. It has signed agreement with at least six ISPs in India. VSNL's decision to cut down international leased line tariff is seen as consequence of the business activities of these satellite companies. Leading ISPs Bharti and Dishnet have announced their plans to set up undersea cables between India and Singapore costing millions of dollars. This would further bring down the leased line charges drastically in the Indian market place. The VSNL's Internet revenues stand at Rs 129.3 crore for the first half year ended 30 September 2000. The number of leased lines (64 Kbps equivalent) stand at 2,937.