TMT Flash - August 2014

1.TRAI reduces ceiling tariffs for Domestic Leased Circuits ("DLCs")

Press release no. 38/2014 dated July 14, 2014 issued by TRAI reduced the ceiling tariffs for Point-to-Point Domestic Leased Circuits ("P2P-DLCs") by 60% and has brought DLCs of STM-4 (622 Mbps) capacity under tariff regulation. The new tariff regime came into effect from August 1, 2014. The DLCs form crucial building blocks for the delivery of various services like e-commerce, e-governance, internet access for the masses and knowledge based industries likebusiness process outsourcing, IT and ITES. The tariffs for P2P-DLCs have been regulated in the form of ceiling tariffs on the basis of capacity and distance. They were last revised in the year 2005. The present exercise to review tariffs for DLCs was initiated by TRAI in the context of decline in per unit costs of providing DLCs due to (i) increase in demand, (ii) increase in transmission infrastructure, and (iii) increase in the bandwidth