MUMBAI: Videsh Sanchar Nigam Ltd. (VSNL) has significantly reduced prices for its international bandwidth products – international private leased circuits (IPLC) and internet leased lines (ILL).

IPLC prices in India will be reduced by up to 25 per cent with effect from 1 September. ILL tariffs will also fall by up to 40 per cent. These products are offered in India using VSNL’s global network that spans over 200,000 route km, connecting 200 countries.

Demand for international connectivity has been rapidly growing with several Indian companies including Tata Group investing overseas and India emerging as a favourite destination for foreign investors. International connectivity is also an important driver for the growth of the fast growing IT and business process outsourcing (BPO) sectors. The market for international and internet bandwidth is expected to expand as the reduced prices will encourage demand from new customer segments like SMEs, smaller ISPs and academic institutions.

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VSNL also intends to build two new submarine cable systems, one between India and Europe and the other intra-Asia, in partnership with leading carriers in the respective regions. These multi-terabit capacity systems, incorporating state of the art technologies, would interconnect with VSNL’s existing global network that has over 20 terabits of capacity. The India-Europe cable would also provide connectivity to the Gulf region and the African continent, and supplement the Company’s existing bandwidth capacity in several consortium cables in the region. The intra-Asia cable between Singapore, Hong Kong and Japan would enhance the link between the Company’s Tata Indicom Cable (Chennai – Singapore) and TGN Pacific (Japan – USA). The overall build cost of these two cable systems is expected to be in the region of $600 million.

“VSNL has always taken the lead in growing the internet and international bandwidth market in India. We have invested over Rs 25 billion in expanding our global presence and connectivity in the last 2 years. We have regularly passed on the benefits of improved cost efficiencies and service quality to our customers,” says VSNL executive director N Srinath. “The new cables would enhance VSNL’s global network in two of the fastest growing regions in the world,” he adds.

IPLCs are point to point, international private circuits, mainly used by large Indian corporates and multinationals to connect to their regional and global locations. Internet Leased Lines are dedicated high speed connections to access the Internet, used by enterprises and small / medium ISPs.

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VSNL acquired Tyco Global Network (TGN) last year to own undersea cable bandwidth. Early this year it also acquired Teleglobe to become a large international wholesale voice carrier with about 17 billion minutes of traffic annually.