The Hindu Business Line : Telecom cross-talk

THE TELECOM SECTOR is caught yet again in a regulatory cross-talk. Sensitive issues covering the policies of subsidising BSNL's services in uneconomic areas such as rural telephony (Access Deficit Charge; ADC), treating the country as a single tariff area (`OneIndia'), and optimising the use of airwaves for communication services (spectrum allocation) are tangling the wires between the Telecom Regulatory Authority of India and the Ministry of Communications. As all these issues are interlinked and affect the interest of the telecom service providers and consumers, needed is an integrated approach.

Consider, the ADC regime, which is at the final stages of review by TRAI. The regulator appears in favour of switching from the approach based on the type of call (national long distance/international) to one based on the revenue generated. This will straightway eliminate the incentive for misreporting different categories of calls and for the flourishing grey market in international calls besides toning up the collection mechanism. This idea is said to be acceptable to the Department of Telecommunications (DoT) this time around, but the question is: What will be the revenue-share percentage? If one goes by the TRAI Consultation Paper of June 2004, the regulator had argued that based on a revenue share percentage of 2.2 to 5.3, the ADC could be reduced to anything between Rs 1,400 and Rs 3,400 crore. Since the state-owned Bharat Sanchar Nigam (BSNL) derives Rs 5,340 crore from ADC, will the DoT be willing to settle for a substantially lower ADC amount? If the DoT and BSNL insist on pegging the aggregate ADC at Rs 5,300 crore, the OneIndia tariff plan proposed by the Communications Minister will remain a non-starter. Irrespective of whether the ADC is charged on a per minute basis or goes revenue-share, the Rs 5,300-crore burden on private operators will be very high and hardly give them any leeway to equalise the rates between local and long-distance calls. Now, private operators pay BSNL an ADC of 30 paise a minute on all long-distance calls.

Finally, if the OneIndia tariff plan has to become a reality, the Government will have to allow private operators the freedom to bypass the national long distance operators in carrying inter-circle traffic and push BSNL to start sharing its infrastructure. The current regulation provides that any call from one State to another must necessarily pass through a national long-distance operator. Unless BSNL is pushed towards sharing infrastructure, such as allowing subscribers of other private operators to roam in its network, private operators will only clamour for additional spectrum to handle the ever-increasing traffic. If infrastructure sharing happens, private operators will have incentive enough to lower the monthly bill for consumers through innovative tariffs. This will also help free the scarce spectrum towards achieving the Government's objective of multiplying the mobile subscriber base from about 60 million now to over 200 million by 2007.

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