Trai Favours Steep Cut In High-speed Internet Rate

[JAX 1]

TRAI favours steep cut in high-speed Internet rates

By Our Special Correspondent

NEW DELHI, APRIL 29.

The Telecom Regulatory Authority of India (TRAI) today called for "slaughtering'' the prices of high-speed Internet in order to boost broad band usage. "The price of Internet of over 256 kbps should be brought down to about Rs. 400 a month from existing Rs. 1,600 by several fiscal and physical concessions,'' said the TRAI Chairman, Pradip Baijal, here today.

The TRAI feels that the 33 per cent tax and 8 per cent service tax is too high and needs to `slaughtered.' Though the slashing of duties will result in an estimated revenue loss of about Rs. 200 crores annually, the usage will increase dramatically. Recently, business process outsourcing companies had submitted a charter to the TRAI detailing several bandwidth related problems.

Mr. Baijal said the TRAI also wanted the Government to remove anti-dumping duty for recycled computers imported into India and permit 100 per cent depreciation in the first year of computers. All these measures will help increase the number of Internet users to four crores and broadband subscribers to two crores. While the number of phone users has increased rapidly, Internet usage has fallen well below growth projections made from time to time by analysts and the TRAI.

The TRAI has also advocated the unbundling of the last-mile link, which means enabling the use of existing infrastructure of state-owned Bharat Sanchar Nigam Limited's (BSNL) copper network to reach consumers in the households. In other words, BSNL's wide reach to crores of households should be made available to Internet companies.

The TRAI wants conditions to be created to allow Indian and foreign companies to host their websites within the country. This could be done by offering income-tax concession of at least 50 per cent for the first five years. Duties on inputs and finished product used in providing broadband and Internet services should be reduced to the level equivalent to mobile phones and Internet service providers (ISPs) should be exempt from payment of service tax for the next five years.

"The exemption will reduce immediately the cost of purchasing such services by 8 per cent to the consumers, noted the TRAI note on the subject. While waiving the service tax, the TRAI wanted the Union Government to advise states to waive the eight per cent sales tax on items being used for broadband applications.

The TRAI's recommendations were welcomed by the industry. The Confederation of Indian Industry (CII) said, "The recommendations would remove bottlenecks in proliferation of broadband in India.'' The CII has been working extensively towards broadband penetration in India and is pleased that a lot of CII's recommendations, which were submitted to the TRAI have been incorporated in the final report.

According to the CII, TRAI's goals of achieving 20 million subscribers by 2010 affirm CII's vision of broadband playing a key role in boosting the economy and increase the quality of life.

Source: The Hindu

[Tushar 0]

The price of Internet of over 256 kbps should be brought down to about Rs. 400 a month from existing Rs. 1,600 by several fiscal and physical concessions

Wow that would be really great man I waiting for it desperately

[eskay 0]

Whoa, TRAI has only recommended. Let a new govt come in. There's a lot to be done. Changes in duty, taxes, etc. Certain things to be done by states. Legislations to be pushed thru. It should take some time before we see something concrete.

[Tushar 0]

ya maybe after elections will be the time who knows it may even jump to double the current rates