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G. Rambabu

In yet another change that is more short-term in nature, the authority has also decided to expand the scope of ADC to cover the private operators.

New Delhi , Oct 26

THE Telecom Regulatory Authority of India (TRAI) intends to phase out the present system of levying access deficit charges (ADC) on different kinds of calls and instead hopes to set up a separate corpus on the lines of the universal service obligation (USO) fund for the purpose of subsidising fixed line operators.

According to official sources, the USO type of regime would be simpler to implement and does not impose regulatory incentives or disincentives based on ADC burden for all kinds of calls. The prevailing ADC regime should be made to transition to this system within the next couple of years, they said.

Under the present system, TRAI has specified ADC components for each type of call across networks for local, and long distance calls. This component is included in the overall interconnection charges that have been specified by and adds to the cost of the calls, which the operators have to necessarily fork out.

However under the new type of regime, there would be no such component that would burden the cost of the calls and the operators will have the flexibility to resort to competitive pricing. Instead of a specified component, a percentage of the licence fees would be earmarked for the ADC fund, which would then be disbursed to the operators based on the amount of subsidy that they bear.

The sources pointed out that a similar policy is followed with regard to the USO fund, whereby the operators are compensated for their rural obligations. Five per cent of the licence fees paid by the operators are earmarked for the USO fund, which is then disbursed according to their performance in rural telephony.

In yet another change that is more short-term in nature, the authority has also decided to expand the scope of ADC to cover the private operators, apart from the incumbent operators who are the sole beneficiaries at present. The revised interconnection usage charge regime (IUC), which is to be announced shortly, will incorporate these changes.

"The authority noted from examples across various countries that the ADC was made available in general only to the incumbent and not to new entrants. We sought detailed information from the private BSOs based on the normated estimates and found that some of them would require ADC. A partial implementation of the ADC regime would, however, be very difficult and may also generate regulatory incentives/disincentives, which the authority has addressed," they said.

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Access deficit charge regime to be phased out — TRAI plans fund for subsidising fixed services

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