The Telecom Regulatory Authority of India (TRAI) will be reviewing tariffs for domestic leased circuits (DLCs) after more than a decade. The regulator has issued a consultation paper seeking public and industry views on updating the maximum prices that telecom operators can charge for DLCs. These are dedicated, private high-speed data lines rented by large companies, banks, hospitals, government offices, data centres and cloud service providers for secure and reliable internet connections.
The last time TRAI set these price limits was more than a decade ago, through the 57th and 58th amendments to the Telecommunication Tariff Order in July–August 2014. At that time, fixed maximum prices were decided only for certain speeds : 2 Mbps which is common in India for voice/data , 45 Mbps DS-3 which is for high-capacity lines, 155 Mbps STM-1 used for SDH fiber optic and 622 Mbps or STM-4 for backbone links .The price earlier depended on the distance the line covered where Smaller speeds and a modern type called VPN-based circuits were left free for the market to decide.
Now, after nearly a decade, new technologies like Dense Wavelength Division Multiplexing (DWDM), Software-Defined Wide Area Networks (SD-WAN) and Ethernet over Fibre have made it far cheaper to send very large amounts of data with Lines having the capacity to carry speeds up to 800 Gbps and higher. Fibre optic cables are now the main way to provide these services, with several fibre pairs usually active in the main network parts, it said that the number of DLC operators has surged from 7–10 Application Service Providers and 31 National Long Distance Operators in 2014 to 71 NLD operators in 2025 under the Unified License regime, driving broader participation and competition.
The paper said that revenue from DLC services reached about Rs. 13,300 crore in the financial year 2023–24, of which 53 per cent came from traditional direct (point-to-point) lines, while 47 per cent came from the more flexible VPN style, jumping from only 30 per cent in 2014. Many operators already give large discounts between 30 percent and 99 per cent off their listed prices on busy city routes, and 20 per cent to 98 per cent for VPN services. However, in remote areas, hilly regions and places with few operators, prices remain high because building networks there is difficult and competition is low.
TRAI now seeks stakeholder views on updating the DLC tariff framework in areas including whether allowing smaller ISPs to offer leased circuits would boost competition and lower prices, if VPN-based circuits should now face regulated maximum ceilings, how to incorporate cost-reducing technologies like DWDM, SD-WAN, and Ethernet over Fibre into the ceilings, shifting from distance-based pricing to one focused on bandwidth plus service quality promises ,the need for separate or higher ceilings in remote, hilly, and low-competition areas; and the best method for calculating fair maximum prices today,
The paper said that DLCs are very important for digital growth in India, including online shopping, online government services, banking, IT companies, healthcare and education and that TRAI wants to make sure prices are fair for users, services remain good for companies, and new technology is used well while helping more people in small towns and villages get better connectivity.
The last time TRAI set these price limits was more than a decade ago, through the 57th and 58th amendments to the Telecommunication Tariff Order in July–August 2014. At that time, fixed maximum prices were decided only for certain speeds : 2 Mbps which is common in India for voice/data , 45 Mbps DS-3 which is for high-capacity lines, 155 Mbps STM-1 used for SDH fiber optic and 622 Mbps or STM-4 for backbone links .The price earlier depended on the distance the line covered where Smaller speeds and a modern type called VPN-based circuits were left free for the market to decide.
Now, after nearly a decade, new technologies like Dense Wavelength Division Multiplexing (DWDM), Software-Defined Wide Area Networks (SD-WAN) and Ethernet over Fibre have made it far cheaper to send very large amounts of data with Lines having the capacity to carry speeds up to 800 Gbps and higher. Fibre optic cables are now the main way to provide these services, with several fibre pairs usually active in the main network parts, it said that the number of DLC operators has surged from 7–10 Application Service Providers and 31 National Long Distance Operators in 2014 to 71 NLD operators in 2025 under the Unified License regime, driving broader participation and competition.
The paper said that revenue from DLC services reached about Rs. 13,300 crore in the financial year 2023–24, of which 53 per cent came from traditional direct (point-to-point) lines, while 47 per cent came from the more flexible VPN style, jumping from only 30 per cent in 2014. Many operators already give large discounts between 30 percent and 99 per cent off their listed prices on busy city routes, and 20 per cent to 98 per cent for VPN services. However, in remote areas, hilly regions and places with few operators, prices remain high because building networks there is difficult and competition is low.
TRAI now seeks stakeholder views on updating the DLC tariff framework in areas including whether allowing smaller ISPs to offer leased circuits would boost competition and lower prices, if VPN-based circuits should now face regulated maximum ceilings, how to incorporate cost-reducing technologies like DWDM, SD-WAN, and Ethernet over Fibre into the ceilings, shifting from distance-based pricing to one focused on bandwidth plus service quality promises ,the need for separate or higher ceilings in remote, hilly, and low-competition areas; and the best method for calculating fair maximum prices today,
The paper said that DLCs are very important for digital growth in India, including online shopping, online government services, banking, IT companies, healthcare and education and that TRAI wants to make sure prices are fair for users, services remain good for companies, and new technology is used well while helping more people in small towns and villages get better connectivity.
