Global bandwidth prices to fall 20%

New Delhi, Aug 1 | Updated: Aug 2 2005, 05:30am hrs
International bandwidth prices in the country are going to fall further by end of this year once the sea-me-we-4 (smw-4) cable commences operations in October 2005.

The undersea cable will offer huge capacities from South East Asia to India to Middle East to Western Europe resulting in an average drop in tariffs by 20%, a consortium member of smw-4 said. Increase in supply of international bandwidth would automatically result in a drop in tariffs. While the prices of bandwidth on westward route Middle East to Europe may drop by roughly 20%, the drop in eastward routes may be higher as an overcapacity scenario prevails with Bhartis I2I and Tata indicom cables between Chennai and Singapore,he said.

The international bandwidth prices in India have gone down by 90% from a high of Rs 16.37 crore five years back to the prevailing price of Rs 18 lakh for E1 (2mb) level connectivity. For higher capacities like stm-1 (155 mb) connectivity the prices have fallen over 60 per cent from Rs 21 crore per annum in 2001 to Rs 8 crore per annum currently. Prices for ds-3 (45 mb) connectivity have also seen a 60% drop from Rs 7.5 crore per annum in 2002 to Rs 3 crore per annum currently.

Over the last three years post-disinvestment of VSNL, there have been as many as five price reductions. The last four reductions have happened over a period of 16 months, the member said. The current demand of international bandwidth in India is estimated to be around 16-18 gb. The current supply is estimated to be over 515 gb, largely concentrated on India - Singapore route.

Increase in supply of international bandwidth will result in tariff cuts
Over the last three years, there have been five price reduction
The SMW-4 consortium consists of two Indian players, including Bharti and VSNL. Both Bharti and VSNL own one landing station each at Chennai and Mumbai respectively. BSNL has also announced plans to set up a cable between India and Singapore through the Andaman island. It will take 8-10 months for the BSNL cable to be in place if the laying process is done at a pace similar to VSNLs Tata Indicom cable.

Flag Telecoms much-awaited Falcon cable, which will cover a similar footprint like SMW-4 is expected to be set up by January 2006. According to sources, VSNL may continue on its roadmap of price cut as and when the planned capacity increment takes place.The sea-me-we-4 submarine cable network would span about 20,000 Km - approximately half of the circumference of the globe - linking 14 countries, including Singapore to France via Malaysia, Thailand, Bangladesh, Sri Lanka, India, Pakistan, UAE, Saudi Arabia, Egypt and Italy, along with 16 landing points.