This report provides an independent assessment of whether current regulations of cable landing stations in India are appropriate.
Elsewhere in the world, the international practice is for:
- The cable landing station owner to recover its operating and capital costs from the cable owner
- The cable owner to charge customers a fee for international circuits, which includes both a usage charge for capacity in the cable and a usage charge for the facilities of the cable landing station.
- Charges for use of the cable station by buyers of international capacity to be limited to co-location space, connection to the international cable and backhaul (if required).
In many developed markets competition in the supply of international capacity and cable landing stations is sufficiently strong that regulation of cable landing stations is not required. At the same time the cable landing station charges in these countries are much lower than in India. This suggests that this competition is effective in these markets.
In India there is now a diverse and competitive supply of international submarine cables. However, the ownership of cable landing stations is highly concentrated and access charges at Indian cable landing stations are more than ten times higher than elsewhere in the world.
The current high cable landing station charges are contrary to the interests of Indian consumers and businesses. They raise end user prices, slow the take-up of mobile broadband in India, and damage the competitiveness of Indian businesses in world markets. They also weaken competition within the domestic Indian telecommunications market.
The report provides recommendations to the TRAI for adapting regulation of cable landing stations.