The Telegraph
Since 1st March, 1999
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Drop signal on long-distance calls

New Delhi Nov. 9: The cost of international and domestic long-distance calls from private mobile and fixed-line phones to a subscriber of Bharat Sanchar Nigam (BSNL) is likely to plunge by 50 per cent, but operators are refusing to say just yet whether they will pass on the entire benefit to the consumers.

The department of telecommunications (DoT) has approached the Telecom Regulatory Authority of India (Trai) to revise the collection of access deficit charge (ADC) from a per minute call basis to a revenue sharing system. If this is done, it will bring down the cost of the calls sharply.

The ADC is a charge paid by operators to BSNL, primarily to provide telephones in rural and unremunerative areas. Usually, telecom companies pass on the full benefits of such cost reductions. In the case of the ADC, they will be under pressure to do so since the entire levy is borne by the consumer.

If the regulator accepts the proposal, the STD rates for calls made to BSNL’s fixed-line phones may come down by 20 to 30 paise per call. The per minute outgoing ISD call rate could come down from Rs 2.50 to Rs 1.25 and incoming calls from Rs 3.25 to Rs 1.65 per call.

A senior Trai member said, “We have received the suggestion from the DoT and it is under examination. This issue will be addressed when we notify the tariff order on the ADC. We are in the final stages of completing the analysis and it may be announced by the month-end.”

Trai chairman Pradeep Baijal has been a major advocate of bringing down the ADC.

He recently said, “Unless the ADC is brought down from the existing level, the growth in mobile telephony would be difficult. The ADC must come down to introduce lower tariffs and unless tariffs go down further, the kind of growth that happened in China will not happen in India.”

The telecom regulator has also consistently maintained that lowering of the ADC would not harm the creation of a robust rural telephony network.

A senior DoT official said, “Trai has to decide about the percentage and quantum of revenue share and also notify it before we can request the BSNL board to adopt it. We would like the regulator to retain the existing level of the ADC to BSNL at Rs 5,000 crore. We will wait for the notification.”

Industry observers said the ADC component on incoming ISD calls, which accounts for Rs 2,000 crore of the total Rs 5,000 crore to BSNL, would be a major issue to tackle.

The private operators have alleged that the public sector company uses this amount to cross-subsidise its mobile calls and other value-added services. ISD operators like Bharti, Reliance, and Videsh Sanchar Nigam Ltd will have to rework their ADC calculations since the levy is collected by them and passed on to BSNL.

A senior AirTel executive said, “The cost per call will drop if a revenue share model is adopted for the ADC, but it will depend on the percentage decided by the Trai. However, the growth in ISD traffic may bring down the tariff.”

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