The Telegraph
Since 1st March, 1999
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Finger on poll pulse, phone rate cut
- BSNL rolls back hike under pressure, offers more fixed to cell talk time

New Delhi, May 13: Fixed line telephone users, rejoice! State-run telephone companies — Bharat Sanchar Nigam Ltd and Mahanagar Telephone Nigam Ltd — today rolled back their rates by 50 per cent for all calls made to cellphones.

The rate cut comes in the form of longer talk-time per call. Each call to a cellphone was billed at Rs 1.20 per 30 seconds under the new tariff regime that came into effect from May 1.

Under the revised formula that comes into effect from May 17, the fixed to cell talk time will be increased to one minute per call; the call rate will remain the same.

The telephone companies have also raised the number of free calls by 20 calls a month to 50 in urban areas and from 50 to 75 for rural subscribers of BSNL. This change will come into retrospective effect from May 1.

In the case of MTNL subscribers in Delhi and Mumbai, the number of free calls has been increased from 30 to 60 calls while the pulse rate remains the same at 60 seconds per call.

The rate cuts came after Prime Minister Atal Bihari Vajpayee held a round of discussions yesterday with communications minister Arun Shourie over the controversial 500 per cent increase in telephone rates by basic telephone operators. Under the old regime, telephone calls were billed at Rs 1.20 per three-minute pulse.

Vajpayee had been spurred into action after the government was raked over the coals in Parliament by Opposition leaders who grasped a red-hot issue from which they could find political mileage.

The political compulsions within the government and the fear that the Opposition parties would exploit the increase in telecom rates during the forthcoming Assembly elections prompted Shourie to direct BSNL and MTNL to roll back the change in pulse rates -- which determine the cost per call -- and offer more free calls.

The tariff change will hit both the telephone companies with BSNL, the country’s largest telephone operator, expected to suffer a revenue loss of Rs 3,476 crore in the financial year 2003-04 and MTNL Rs 140 crore.

Denying that the rollback decision was taken after yesterday's meeting with Vajpayee, Shourie said: “Why should we involve the PM' The protest was first made in Parliament and there had been a general opposition to the rate hike.”

Shourie wasn’t pleased about the way he was forced to recast tariffs -- the fourth time since 1999 that the government has had to make a volte-face on telephone tariff rationalisation.

The minister said there was a flipside to the tariff rollback: it would take longer for new customers to get telephone connections and the plans to provide communications facilities in rural and remote areas would be affected as the state-owned telephone companies would not have the requisite funds.

“This will lead to delays in the expansion of telecom network and the revitalisation of the network with the replacement of outdated technologies in exchanges,” Shourie added.

“BSNL has already made a request to the finance ministry for financial support of Rs 2,300 crore to undertake the unviable projects. However, this has been turned down. Now, the two companies can only hope to survive in the market on the expectations that volumes will increase sufficiently enough to bridge the financial gap,” said Shourie.

According to BSNL chief Prithipal Singh, the surpluses of BSNL are likely to come down to about Rs 2,500 crore during 2003-03 from Rs 6,500 crore last year due to the drastic fall in STD charges.

There’s good news for all those who were barred by PCO owners in recent weeks from making calls to cellphones. “We have not made any changes in the existing system and the same rates will apply. While there was some problem in the coin-operated booths since it was not tuned to recognise the new pulse rate. This will be rectified soon by implanting a new chip,” said BSNL chief Prithipal Singh.

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