The Telecom Regulatory Authority of India (TRAI), after regulating international bandwidth prices, is favoring tariff regulation in the domestic bandwidth market to remove constraints for effective competition in the segment.

Bandwidth is the medium for carriage of data and voice services across countries in the world (IPLC) or across the country (Domestic Leased Circuit).

According to a TRAI official, it is appropriate to continue with the tariff regulation in the DLC market until such time the competition becomes adequate and effective. The long-term goal of the telecom regulator is to establish effective competition in the sector such that regulation of tariff may not be required.

The TRAI official also pointed out that there is evidence of lack of competition in the local lead (last mile access) within city circuit segment. The non-availability of local leads, which has been represented by various stakeholders or service providers, appears to be the main obstacle for promotion of competition in DLC market.

Meanwhile, DLC is an important element that is the key telecommunication resource used by various operators, corporates, and individuals for data, voice, video, and Internet connectivity. Almost all telecom service providers from mobile operators to Internet service providers use leased lines.

Internet Service Providers (ISPs) also make use of DLCs for connecting their customers to their Nodes for provision of leased line Internet access. In addition, these are crucial building blocks for e-business, e-governance, Internet access, BPO, and the IT industry.

Now, TRAI has observed that effective competition in the DLC segment in all areas is still lacking, and that there appear to be problems on the front of efficient utilization of existing DLC infrastructure to be able to reach customers. The regulator therefore feels there is an urgent need to address the issue of lack of effective competition in this segment.

Besides, effective competition in this segment can make a positive impact on the overall economy by driving costs down for businesses and offering consumers a wider range of products and services at more competitive prices.