The Telegraph
Since 1st March, 1999
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New levy on long-distance calls

New Delhi Oct. 29: Long-distance call costs will rise by Rs 1.10 a minute — but it isn't clear yet whether the increase will be passed on to consumers.

The increase in the call costs arises because the telecom regulator today slapped an access deficit charge (ADC) and a revised interconnect user charge (IUC) on fixed, cellular mobile and limited mobile operators. The new levies will impact STD and ISD call costs.

While the Telecom Regulatory Authority of India (Trai) said it did not expect the operators to pass on the increase to their consumers, telephony service providers were reluctant to say whether they would desist from carrying out a tariff revision.

Trai felt that tariffs would actually go down despite the imposition of ADC and IUC charges.

However, telecom operators felt that it would not be possible for them to absorb the entire cost. The new system will come into effect from December 1 and would be done away with in the next three to five years.

The cost of STD calls made from cellular mobile and wireless-in-local-loop (WiLL) mobile or limited mobile phones could go up as a result of the ADC and IUC charges.

The revised interconnection user charge, which has to be paid by operators for using another operator's network to land calls, is aimed at bringing down the tariff for consumers in view of reduced overall financial burden on service providers.

Trai has reduced ADC — a financial burden to be borne by all operators to enable state-owned Bharat Sanchar Nigam to offer telephony services in rural and other unremunerative areas.

This cost was earlier realised by BSNL from its domestic long distance and international long distance traffic. But with the opening up of these two sectors to private players and the subsequent fall in rates, the ADC has increased to Rs 13,000 crore. This has been brought down to Rs 5.340 crore with the imposition of ADC and IUC on cellular and limited mobile operators.

Announcing the new IUC and ADC tariffs, Trai chairman Pradeep Baijal said, “We, however, feel that the tariffs will not rise in any of the categories. Rather, they should come down under the net impact of ADC and IUC. The total amount in both components have come down or has been retained at their existing levels. We are optimistic that this will exert a downward pressure on tariffs.”

The regulator has also announced forbearance in the case of tariffs for basic services, with exception of tariffs for rural areas, PCOs and village phones. This effectively means that operators will no longer be required to levy a rental for rural phones based on Trai slab but can either raise or reduce it.

The Bharti group, the largest private cellular operator, welcomed the new IUC and ADC regime saying that it had brought about uniformity in the structure. However, it expressed concern over its possible impact on ISD and STD rates.

“The new regime is uniform and will bring in the much-desired level playing field in the industry. It is encouraging to note that ADC will eventually be merged with the USO fund,” said Akhil Gupta, joint managing director of Bharti Televentures.

However, Gupta expressed concern over reduction in termination charge and a minor rise in carriage charges. “We feel this is inadequate,” he added.

T. V. Ramachandran, director-general of COAI, said, “This is absolutely illegal and unfair. Cellular customers are being made to pay for fixed network which they are not using. The matter will be examined in detail before we make any response to Trai and the government.”

S. C. Khanna of ABTO said, “It is useless. The IUC is meant for BSNL. The regulations mean that private basic service operators (BSO) would be funding BSNL which is a profit-making organisation as ADC collected on WiLL (M) inter circle calls will be paid to BSNL and cannot be retained by private BSOs.

GoM help sought

Cellular operators today sought an immediate intervention of the GoM on telecom, scheduled to meet on Thursday, to reject Trai's recommendations on unification of licences and pleaded that the TDSAT judgement restricting WiLL mobility services within a local area be enforced.

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