In an application filed with the Telecom Regulatory Authority of India, Videsh Sanchar Nigam Ltd has sought regulatory approval to reduce prices on one of its premium connectivity modes, DS3, citing an increase in bandwidth on a submarine cable system.

VSNL had sought a 10 to 20 per cent reduction on DS3 lines, a mode providing 45mbps connectivity and is mainly used by business process outsourcing companies in the country, industry sources said in Mumbai.

The Internet gateway and service provider had recently upgraded the submarine cable system at its end by around 38 per cent, resulting in an increase in bandwidth without a hike in fixed costs, they said.

The move was to make VSNL bandwidth prices competitive with those of trans-Atlantic and trans-Pacific cable networks, they added.

VSNL officials declined to comment even as they claimed the company's pricing was "competitive" compared with those of the service providers based in the United States, the United Kingdom and Singapore.

The reduction, which VSNL had termed as "rationalisation" in the filing, would result in the company being able to provide bandwidth at "highly competitive" prices to destinations such as the US, the UK, Kong Kong and Singapore, they added.

As of now, VSNL charges $68,000 per month for a restorable DS3 connectivity to the US and the UK, and $60,000 to Singapore and Hong Kong, while the rates for a non-restorable link are a monthly $50,000 to the US and the UK and $48,000 to Singapore and Hong Kong.

A restorable link provides 99.5 per cent uptime monthly on a premium connectivity, with a link provided over a redundant cable in case of a failure.

Under a non-restorable link, the company offers 99 per cent uptime per month, with restoration based on "best of efforts".

VSNL has 14 DS3 customers, comprising over 1 per cent of its clientele in the country and it levies a fee on a half-circuit basis, even though the company takes ownership on a full-circuit basis.

Earlier, leading US telecom service providers, including Competitive Telecommunications Association and Association of communications Enterprises, in a letter to the department of telecommunications Director NP Singh had alleged that VSNL was levying higher bandwidth charges and was providing services on a "discriminatory basis."

They also had alleged that "the commercial practices of VSNL have created an artificial shortage of capacity, which prevents competitive operators from meeting the full bandwidth demands of their customers."