The Hindu Business Line : India One may bring STD rates to below Re 1

STD calls made to any part of the country could be priced at a flat rate of less than Re 1 a minute with the introduction of the India One tariff from January 1, 2006.

According to the draft New Telecom Policy, the Department of Telecom (DoT) is considering a single uniform rate based on the weighted average cost involved in carriage of telephone calls.

Currently, the maximum STD rate is Rs 2.80 a minute, which incorporates the carriage cost and the Access Deficit Charge (ADC).

The carriage cost varies between 20 paise and Rs 1.10 a minute depending on the distance of the call. The carriage charge is the amount paid to the long distance carrier by the cellular and fixed telephone operator.

According to the DoT's draft New Telecom Policy, the India One tariff concept would apply to STD calls to anywhere in India.

"The rate could be a single uniform rate irrespective of the distance slab and without `zero dialling.' The determination of this rate could be on the basis of weighted average costs involved in carriage," the draft policy said.

The DoT paper said that the current procedure of terminating the calls would be reviewed and licences may be amended. "The concept of India One would play a significant role in market expansion. Each service area is characterised by presence of six to eight players resulting in intense competition.

DoT has permitted inter-service area connectivity within the four States of Maharashtra, Tamil Nadu, West Bengal and UP. To enable rapid spread of affordable services, it may be appropriate to extend this arrangement to the entire country," the draft policy paper said.

Telecom service providers, however, said the Government must address issues such as ADC (which private telecom companies pay to state-owned BSNL) and lowering the carriage charge further before introducing India One tariffs.

"If the tariffs have to come below Re 1, then the ADC needs to be charged as a percentage of the revenue and not loaded on a per minute basis. Also the carriage charges, paid to the long distance operator, need to be brought down drastically if the new tariffs have to be viable for the access provider," said a cellular industry representative.

Long distance operators, on the other hand, pointed out that the Government must ensure that the access operators pass on the reduction in carriage charges to the consumer.

"There are cases where access providers give only 50 paise a minute for STD calls higher than the 500 km slab. The consumer, however, is still charged more than Rs 2 a minute by the operator. This needs to be checked by the regulator if India One tariff has to succeed," said a national long distance operator.

Some operators pointed out that the telecom regulator must be involved in the process, since it is a matter pertaining to tariff fixation.

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