The Hindu Business Line : Telecom industry `disappointed' with new ADC regime

WHILE the new Access Deficit Charge regime has brought some cheer to consumers, the telecom industry has expressed disappointment with the order announced by the Telecom Regulatory Authority of India.

Both cellular and basic operators have said the revised rates have not provided any benefit to Indian private operators even as international carriers stand to gain almost Rs 500 crore every year.

As per the TRAI order, fixed line operators other than BSNL have been excluded from retaining ADC on incoming calls. Companies such as Shyam Telecom, which offers fixed line service in Rajasthan, until now received close to Rs 2 crore a year from the deficit charge.

While TRAI has justified the decision by saying the move was necessary to keep the ADC burden as low as possible, the Association of Unified Telecom Service Providers of India (AUSPI) said the move was a serious blow and unjustified. "The new regime will only serve to discourage investments in the fixed line business since this forced regulatory imbalance will make the private operators' business unviable," said Mr S.C. Khanna, Secretary General, AUSPI.

The move will hit Mahanagar Telephone Nigam Ltd, Reliance Infocomm and Tata Teleservices.

BSNL, which was against any reductions in ADC on the international long distance segment, took a guarded approach to the new order. Mr A.K. Sinha, Chairman and Managing Director, BSNL, said, "The assumptions on which these cuts have taken place is that number of per minute usage has gone up. We have to make the calculations to see whether it (the ADC quantum) remains the same or not."

TRAI has said the total quantum of the ADC payable to BSNL would not change despite the reduction in per minute charges, owing to increasing subscriber base. However, other BSNL officials expressed scepticism at TRAI's observation on grounds that the call traffic had not increased over the last one year despite an increase in subscriber numbers.

Cellular operators said the new regime would not be effective in discouraging the grey market in ILD calls, as reducing the ADC from the present Rs 4.25 a minute to Rs 3.25 a minute would only marginally reduce the incentive of arbitrage opportunity and benefit international carriers who would have to pay a rupee less. The Cellular Operators Association of India (COAI) pointed out that TRAI has not adequately addressed the deficiencies and anomalies of the previous regime.

International carriers also expressed dissatisfaction with the new regime on grounds that the incentive to route ILD calls through legal channels have not really reduced since TRAI has also brought down the ADC on domestic long distance which keeps the gap in arbitrage almost at previous levels.

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