The Telegraph
Since 1st March, 1999
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Videsh Sanchar wants Trai to settle tariff row

New Delhi, Oct. 1 (PTI): Videsh Sanchar Nigam (VSNL) has sought the regulator’s intervention to resolve its tariff row with BSNL on the basis of “fair revenue distribution on internationally accepted cost-based norms”. Sources say VSNL recently requested the Telecom Regulatory Authority of India (Trai) to step in to resolve the situation created by BSNL’s “unreasonable stand”. Officials at the watchdog refused to comment on the issue.

VSNL says carriage charges should not vary for different types of calls. Its chairman, Ratan Tata, met communications minister Pramod Mahajan in this regard and the issue is also being discussed between deputy Prime Minister L. K. Advani, Mahajan and disinvestment minister Arun Shourie. A round of meeting took place last week, while another is due on October 5.

Company sources said for incoming calls, about Rs 17 was being divided between VSNL and BSNL at Rs 8.50 each under the old revenue-sharing arrangement. In view of the international competition, the component of Rs 17 was now reduced to Rs 8, while under international practices, terminator gets about Rs 1 to Rs 2.

“What BSNL is demanding is that for termination of up to 50 kms, Rs 4.40 per minute should be charged for 50-200 kilometres, Rs 6.40 for 200-500 kms and Rs 13 for over 500 kilometres,” they said.

Sources said VSNL has made an interim payment of Rs 4 for the April-May period, to be adjusted based on the decision of the regulator, but did not give details on the amount of interim payment.

VSNL sources said the company has proposed sharing of revenues on incoming international long distance calls on international norms, saying the total average for all distances should not exceed Rs 4. In its letter to Trai, the regulator not only demanded specific rates for revenue sharing but laid emphasis on determination of these rates on a “scientific basis”. On outgoing calls earlier, about Rs 17 from the Rs 40 charged from customers went to international carrier; from the remaining Rs 23, VSNL received Rs 8 and BSNL Rs 15.

With the costs coming down to Rs 24, BSNL demanded between Rs 16-17 per minute, a proposal which would leave VSNL with Rs 6-8 to be shared with the international carrier.

VSNL has suggested that BSNL should keep Rs 9-11 on an average. That would leave Rs 13 to be shared with the international carrier. In its letter to the regulator, the firm has argued that a higher termination rate would compel it to negotiate higher settlement rates with international carrier and, as a result, the grey market might flourish.

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