India - DoT opens doors for bandwidth resellers

In a move that would improve the availability of cheaper international bandwidth in the country, the Government has decided to allow unlimited number of bandwidth resellers in the country.Bandwidth resellers are companies that do not own any infrastructure, but buy capacity from large international long distance service providers like VSNL or AT&T and then resell it to consumers like business process outsourcing units. This could result in cheaper Internet services and international long distance calls. While this decision was taken a few months ago, DoT has decided to start receiving applications for reselling licences starting today. DoT has, however made it clear that only Indian entities will be given the licence to become a reseller. Beneficiaries The move will benefit larger consumers of bandwidth such as ITeS companies, BPOs and Internet service providers who will be able to buy bandwidth from the resellers at much lower costs.It will also benefit IT services companies as they will be able to expand their product portfolio by bundling international leased lines along with the services that they offer to their customers. ILD operators, who can now ride on the resellers to increase their reach apart from getting assured business.Licence fee However, DoT will also impose a licence fee on the resellers, who will have to pay 6 per cent of their annual revenues. While this is being done to level the playing field with long distance licence holders, the revenue share could act as burden on the service provider. More competition In countries such as Germany, there are 27 resellers offering international bandwidth compared to five licensed ILD operators. Similarly, in the US, of the 32 bandwidth providers, 26 are resellers, making bandwidth available at rock-bottom pricesDoT said that resellers are being permitted with a view to promote competition and affordability in international bandwidth.