Comparative Analysis of Leased Line Tariffs

Posted on August 24, 2005  /  5 Comments

by Sriganesh Lokanathan
The study has been undertaken in keeping with the proposed 2006 theme of the World Dialogue on Regulation for Network Economies (WDR), ‘Sector and Regulatory Performance Indicators.’ The definition of standardized benchmark indicators with their respective viable methodologies in the Asian context is required for an accurate comparative analysis of the regulatory and sector performance in ICTs.
Recognizing that this constitutes a participatory exercise among experts in the telecommunication industry standards and regulatory affairs, telecom authorities and statistical organizations as well as academics and interested individuals, this preliminary methodology framework document was commissioned to lay the groundwork to initiate and foster active discussion among the aforementioned participants on issues related to the proposed 2006 WDR theme.
With these guiding principles, this preliminary methodology on domestic leased line tariffs was formulated since national leased line tariffs is an important indictor of the potential of countries to foster broadband coverage and network expansion. LIRNEasia intends to test the methodology first in the South Asian region and then extend it to the rest of Asia.
Where available, the latest data from India, Pakistan and Sri Lanka are included.

Study on Comparative Analysis of Leased Line Tariffs – Version 1.0


  1. Sriganesh Lokanathan

    1) It should be noted that the figures included in the document represent annual tariffs.
    2) Furthermore, the figure for the local tail circuit of 2kms reported for Sri Lanka should be $6,518 and not $543 as mentioned (which was later clarified as the monthly rate). This suggests that local tails are priced exorbitantly and are nearly 17 times the equivalent rates in India!

  2. Dear Ganesh,

    You have done an excellent research, but it would be great if you can include some graphs instead of just presenting your findings in text and tables. A graph can illustrate the points in a much better manner.

  3. I think TRAI is doing a great job with leased line prices, Indian domestic leased line prices are in most cases lower than the lowest EU benchmark. The international leased lines market in India was not competitive comprising only three players. TRAI introduced price ceilings for international leased line prices that reduced prices sharply. Now the regulator is going further, it is recommending that license fees for providing international leased lines be scrapped and free entry be allowed. This will have huge benefits for BPO businesses that have been straddled with high internatinal bandwidth costs. If what TRAI is proposing is disposed by DoT (ministry), India will probably have the world’s lowest international leased line prices and will become an even more attractive destination for BPO-related investments. I think there are lessons that the regulators in this region can learn from TRAI.


    Trai seeks to end licence fees for leased int’l lines


    NEW DELHI: This could open the flood gates for international leased lines in India. The telecom regulator now wants to bring in competition in the international leased line segment by doing away with the licence fees altogether. The Telecom Regulatory Authority of India (Trai) has recommended that the government should allow any company to provide international leased lines without paying licence fee.

    At present, only international long distance service providers can offer leased lines. Trai has argued that this will increase competition and bring down prices. International leased lines are used by software exporters, BPO units, banks and other financial service companies and internet service providers (ISPs). The success of broadband services also depends on good international connectivity of domestic service providers.

    Currently, there are only three international leased line pr-oviders in India — Tata, Reliance and Bharti. In most developed markets, there are more than 30 leased line providers. This is one of the reasons the price of leased lines in India is one of the highest. “Prices in India should be based on competition. This is possible only if there is more competition in the market,” said a Trai official.

    International long distance service providers have to pay a one-time entry fee of Rs 25 crore and an annual revenue share of 15% of the adjusted gross revenue. Trai has said that the government should not charge any fee if a company only wants to provide leased lines and is not interested in offering international telephony.

    The regulator has also said the government should permit resalers in this business. The ILD sector was opened up for competition in ’02. Trai is of the view that the resale of leased lines should be permitted from ’07. It feels that five years are enough for the development of infrastructure.

  4. Where can I access the file attached to this report? Unable to open the link shown here.

  5. The problem has been corrected. You can access it from the link above.