VSNL hikes internet access rates in India

I started recieving reports from friends and relatives in India a few days ago about an announcement that the only Indian ISP VSNL (Videsh Sanchar Nagam) was about to hike up its rates for Internet access, across the board. VSNL is a government owned monopoly, there’s no hope that the Indian telecommunications market will see competition anytime soon (VSNL’s express monopoly over international telephonic communication was extended for another 10 years in 1996). VSNL general price structure is interesting. Like a number of other developing countries, international telecommunications is heavily over-priced ($3 dollars a minute to the US for instance, when rates in the other direction average $0.70) and telecommunication services to rural areas are heavily subsidized. They’ve been reasonably successful at extending telephone services to large sections of the country.

VSNL has also sought to interpret its monopoly in terms of Internet services. There is no other ISP in India providing accounts to users (there is the rather elite academic network, ernet, but it extends to a relatively small number of Universities, primarily the largest engineering schools in India) though there are some BBSs some of which are on Fido-Net (you can guess how much they pay calling the nearest Fido-Net hub, in Singapore, VSNL has flat rates for international calls).

Basically, the only option for users is VSNL. VSNL rate structure was as follows:

Shell access	Rs.5,000/$150 per year
SLIP/PPP	Rs.15,000/$450 per year
Student-Shell   Rs.500/$15 per year

doesn’t sound bad right? Except when you hear that this is restricted to 500 hours of usage per year (it used to be 250, but they raised it to 500 a few months ago). That’s a lot, various ISPs in the US offer shell access for $7 a month with a one hour per day restriction. And SLIP/PPP is generally $20 a month for unlimited access. By any accounts, VSNL is overpriced.

This of course isn’t all a user pays. Local calls are generally metered, usually at about Rs. 20 an hour ($0.60). Now it sounds really expensive right? Considering the average per capita income in India was just about $300 in 1991, it is. Granted, the network is a plaything for the relatively well-off, in India moe than otehr parts of the world. But it’s still something that should be easily accessible. The real problem, of course, is that there is no competition. It would be relatively easy to set up an ISP in a city like Bombay and provide shell unlimited shell access for about $8 a month. SLIP/PPP would be about $20 (though employment costs are much cheaper, machines and network access tends to be expensive). That, however, doesn’t seem like it’s going to happen anytime soon.

Meanwhile, VSNL decides it wants to raise its rates and put in place hourly access chargesd like so:

Excerpted from:



  VSNL Announces Steep Hike In Internet Access Tariff

   A sharp increase in the cost of Internet access in India is on the
   cards from April 1. Videsh Sanchar Nigam Ltd (VSNL), the sole provider
   in the public sector, has announced new tariff structures. Internet
   users of VSNL`s Gateway Internet Access Service found E-Mail waiting
   for them on Wednesday, when they accessed their local node, which
   provides details of the new pricing structure. Hardest hit would be
   the student surfers for whom VSNL was hitherto providing 500 hours of
   Net Time in a year, in the ``text only'' on Shell Account mode for
   just Rs. 500. This ``one buck an hour'' service was touted as the
   lowest in the world. Students will now be charged a refundable,
   non-interest bearing deposit of Rs. 500; an annual ``account
   maintenance charge'' of Rs. 500 and Rs. 5 for every hour of online
   time. For 500 hours of usage, as in the past, the total investment
   expected from students will therefore amount to Rs. 3,000 -- an
   effective sixfold increase in the first year. For the general public,
   who were charged Rs. 5,000 for 500 hours or one year of ``text only''
   Shell Account Internet service, the new rates from April are:
   refundable deposit Rs. 2,000; with annual maintenance charge of Rs.
   3,000 and an hourly rate of Rs. 15. New subscribers will therefore
   have to pay Rs. 10,500 for 500 hours of net time -- more than double
   the present tariff.

I wish I could say there’s something people here can do about it, but I can’t. At most one can hope to send some encouraging mail to the “Internet Users Club of India” which met this friday to discuss this issue, their address is <iuci@mail.mafatlal.co.in>. One could also send a message expressing concern to <helpdesk@giasbm01.vsnl.net.in>but it’s liable to be ignored. The IUCI is probably the only place any effort consistent effort to resist VSNL might come from. So that’s probably the best place. There are no local newsgroups at VSNL, so there’s no forum for the users to get together and talk about their concerns, there isn’t a discussion list either (though I could possibly set one up). You could join the signature campaign at ApnaNet but no one knows what effect that will have.


VSNL home page            <URL:http://www.vsnl.net.in/>
The Indian Techonomist    <URL:http://www.dxm.org/techonomist/>
Internet Users Club India <URL:http://www.mafatlal.co.in/guests/IUCI/>
ApnaNet                   <URL:http://www.apnanet.com/>