According to a release, the TRAI has observed that there is lack of effective competition in the Domestic Leased Circuits segment, with around 40 per cent of the domestic bandwidth available in India unutilized. To improve bandwidth utilization and competition, TRAI has issued a consultation paper (pdf, 143KB) to solicit opinion from ISPs, Consumers, Consumer Organizations and other stakeholders, to be submitted by 15th December.
Interestingly, among the issues mentioned is that new entrants find it difficult to compete in last mile. A Garnter study has also been quoted:
a limited number of players compete and only incumbent carrier BSNL can provide comprehensive national coverage. However, there is measured competition in key routes. As a resut, prices have decreased, but prices are still high compared with competitive markets, including a comparable developing market such as China.
While TRAI believes that tariff regulation be continued to encourage competition, it also suggests an interconnection regulation between operators- hence a possible unbundling of the last mile. Unbundling, if the interconnect charges are reasonable, should increase competition and result in a massive reduction in cost of deployment for private players. Since their virtual monopoly is being threatened, BSNL and MTNL wouldn’t be too pleased to host private players on their wireline networks. Meanwhile, most consumers still struggle with poor connectivity, slow connections and terrible (or non existent) customer-care.
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