DoT till now had been charging a whopping 100 per cent premium from the e-mail service providers on leased line rentals citing reasons that the lines were being used for commercial purposes.

According to sources, in a recently issued circular, DoT has informed the e-mail service providers that it will stop charging the 100 per cent premium on leased line with effect from July 10, 1998.

Since the e-mail service providers were licensed in 1994, DoT had been charging them twice the amount that it charges others for lines leased from it. For instance, if DoT charges Rs 10 lakh for a 64 Kbps leased line between New Delhi and Mumbai from a company for its internal wide area network, the e-mail service providers were charged Rs 20 lakh for the same circuit.

Leased linesare crucial for e-mail services as any data (or e-mail) sent from one city to another has to be routed through them with service providers not allowed to use any other medium of data communication like VSATs. According to some service providers, the leased line charges make up an estimated 30 per cent of their total cost of operations.

This DoT decision of not charging a premium on leased line rentals from the e-mail service providers will give them a fresh lease of life as almost all of them have been incurring heavy cash losses. The e-mail service providers have for a long time been asking DoT to treat them on a par with the other leased line customers. In fact, they had even moved the Telecom Regulatory Authority of India (TRAI) to direct DoT to stop charging a premium from them. They had argued that the worldover bulk customers are given a discount rather than being charged a premium.

They had also pointed out that Videsh Sanchar Nigam Ltd (VSNL) has been providing Internet services since 1995 withoutpaying any licence fees while they are charged Rs 25 lakh per annum licence fees.

In fact, the e-mail service providers association had also challenged last year's Internet policy of DoT which had proposed that no licence fee be charged from the private Internet service providers for the first three years. They had argued that since e-mail is a part of Internet services, any such move will kill the e-mail industry. They had, instead, suggested that even they should be exempted from licence fee payments.