In a notification issued to VSNL, the DoT said the new tariffs for dial-up internet access would be Rs 2,550 for the 100-hour account, Rs 5,525 for the 250-hour account, and Rs 8,500 for the 500-hour account. The exact date from which the reduced tariffs will take effect is to be decided by the VSNL board. The board meets once a month and the next meeting is likely to be held in the first week of April.

The revised tariffs will be valid for a one-year period i.e till March 31, 2000, after which they will be reviewed again, DoT said in the notification. This provision has been made in anticipation of a further drop in internet rates during the coming months as more players are slated to enter the market.

A senior VSNL official attributed the cut in internet rates to reducedcosts for international bandwidth and economies of scale. VSNL's subscriber base currently stands at over two lakh -- around 78,000 of which are from Mumbai. The 100-hour account is the most popular with around 60 per cent of subscribers opting for it.

Following the revision, VSNL's per annum growth in subscriber base is expected to accelerate from 120 per cent to at least 200 per cent, the official said. The last cut in tariffs was in 1997 and had resulted in a three-fold increase in the number of internet subscribers -- from 60,000 to 1,80,000.

On an average, internet subscriptions are growing at the rate ten per cent a month, the official said. VSNL, which was the monopoly ISP until 1998, has the lion share's of the market.