The cost of Internet access through dial-up will go up substantially from April 1 this year after the local call pulse rate is reduced from 3 minutes to 2 minutes as per Trai recommendations on basic tariffs announced recently. Currently, a dial-up Internet user pays 15 paisa per minute to ISP for Internet access (@Rs 9 per hour) and 40 paisa per minute to basic operator for dial up charges (@Rs1.20 per 3 minute call). The shorter pulse rate of 2 minutes will increase the cost of dial-up to 60 paisa a minute resulting in an increase of about 40 per cent in total dial up internet cost.
ISPs will also ask the regulator to enforce revenue sharing regime between ISPs and basic operators so that the latter pass on a part of their revenues from dial up Internet access. Basic service companies should pass on 30 per cent of their revenue from Internet usage to us as bulk customers, said Internet Service Providers Association of India (ISPAI) president and Sify Limited managing director R Ramaraj.
The association will also ask the regulator and licensor to define the interconnect charges to be paid by ISPs to fixed line operators and international long distance operators. An ISP needs to connect to the basic operator for last mile connectivity to customers and also to the ILD operators for connecting with international Internet gateways.
Mr Ramaraj claimed that the current Internet service prices at Rs 9 per hour was much below even the variable cost of the operators.
That is the reason, companies are not spending money in acquiring new customers and somehow just maintaining their existing customers, said Mr Ramaraj.
Sifys dial-up Internet service subscribers growth has also been flat in the past one year and remained at 6 lakh subscribers, he added.
However, companies are expecting some relief from the expected price cuts in international bandwidth rates in next few months. We are expecting some drop in international bandwidth rates with i2i becoming operational for data traffic, Mr Ramaraj said.
If revenue sharing was not allowed by the government and the bandwidth prices also did not come down substantially, Internet service prices would go up by 30 per cent to touch Rs 12 per hour by the end of this year, Mr Ramaraj said, adding the prices would be increased in smaller slabs. ISPAI executive council members are meeting in the first week of February to decide final plans to go to Trai and DoT as well as for devising the strategy to increase prices.
Mr Ramaraj was speaking to the media on the sidelines of the launch of Sifys Internet Protocol (IP) backbone as first tier-1 IP network infrastructure in the country.
Sify and the network equipment company, Cisco systems have jointly announced the launch of IP network in Delhi on Tuesday. This will place Sifys network infrastructure at par with a select group of international network service providers such as AT&T, Singtel and Telstra, said Cisco Systems president for India and Saarc Manoj Chugh.