BSNL to hike traffic charges on Lanka cable

India's The Bharat Sanchar Nigam Ltd (BSNL) is set to increase charges for carrying international voice and data traffic through its submarine cable between India and Lanka.

This is on account of the appreciation of the rupee vis-a-vis the dollar and imposition of the service and educational tax on foreign operators for carrying international traffic through it.

Submarine cables are the primary medium for transmission of international traffic - both voice and data. International carriers have to pay carriage charges to submarine providers for using their cables.

In the last one year, the Indian rupee has appreciated over 13 per cent vis-a-vis the dollar. In August 2006, the rupee traded at 46.53 to the dollar. It appreciated to Rs 40.41 per dollar by July 2007.

All submarine cable providers negotiate termination charges with foreign operators in cents. Therefore, any appreciation of the rupee has a direct impact on the revenues of submarine cable service providers.

BSNL is considering increasing the termination charge to 5.1 cents per minute for calls terminating at BSNL's network in metros and big cities from 4.9 cents per minute. BSNL officials have proposed an increase to 6.1 cents per minute for calls terminating in the rest of the country from 5.5 cents per minute.

BSNL has also proposed that the capacity of its India-Sri Lanka cable should be increased by three times in order to reduce the cost of bandwidth and also the cost of termination of a call.