The Telecom Regulatory Authority of India (TRAI) on Friday, said that it will review tariffs for domestic leased circuits (DLCs) after more than a decade. A consultation paper to review the existing tariff framework for Domestic Leased Circuits (DLCs) is afloat to analyse the shift since the last ceiling tariff revision in 2014.
DLCs are dedicated private telecom links used by enterprises, institutions and government bodies for secure data transmission, and are relied upon by telecom and internet service providers that lack transmission infrastructure in specific regions.
TRAI said that the cost of bandwidth has declined significantly over the years due to advances such as fibre optics and Dense Wavelength Division Multiplexing (DWDM), while ceiling tariffs have not been updated to reflect these changes. The regulator also said that while competition has intensified on dense routes, where providers often offer tariffs well below the prescribed ceiling, remote and hilly regions continue to see higher prices due to infrastructure constraints and limited competition.
Tech Gap
As per the consultation paper, revenue from DLC services reached about Rs. 13,300 crore in the financial year 2023–24, of which 53 per cent came from traditional direct (point-to-point) lines, while 47 per cent came from the more flexible Virtual Private Networks (VPN) style, jumping from only 30 per cent in 2014.
Beyond Point-to-Point
The consultation paper also flags the growing relevance of newer enterprise connectivity models, including MPLS-based VPN, SD-WAN overlays, Ethernet over fibre and cloud-based connectivity services, which are mostly bundled with service-level agreements (SLAs) such as uptime guarantees, latency and packet loss commitments.