Business Daily from THE HINDU group of publications
Monday, Jan 14, 2008
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Business Daily from THE HINDU group of publications Monday, Jan 14, 2008 ePaper | Mobile/PDA Version |
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Telecommunications Industry & Economy - Rural Development Info-Tech - Regulatory Bodies & Rulings Telecom access deficit charges on the way out
ADC mainly goes to fund BSNL’s rural phones TRAI says BSNL has access to alternative subsidies Private operators say ADC unfairly benefits BSNL
Thomas K. Thomas New Delhi, Jan. 13 In a move that would bring down telecom tariffs drastically, the Telecom Regulatory Authority of India will phase out access deficit charges from this year. The telecom regulator is set to issue a consultation paper to this effect shortly. ADC is a levy imposed by the regulators on all operators to fund existing rural telephones. At present all private operators pay 1.5 per cent of their annual revenues as ADC and Rs 1.60 per minute on incoming international long-distance calls. The total levy collected is estimated to be around Rs 3,335 crore, of which Rs 3,200 crore goes to State-owned Bharat Sanchar Nigam as it operates more than 95 per cent of the rural phones in the country. Removal of ADC would reduce the burden on private operators to that extent and this could be passed on to customers in the form of tariff cuts. On the other hand, the move could draw protest from BSNL, which has sought extension of the scheme for a few more years as tariff for rural phones is regulated. “Either BSNL should be allowed to start fixing tariffs in rural areas or if it continues to be regulated then the company should be compensated. Telecom is highly competitive sector so why should BSNL bear the burden when the private sector is not willing to set up phone lines in remote areas of the country,” said a BSNL official. TRAI sources, however, indicated that ADC had lost its relevance as BSNL has been getting financial assistance from the Government in various forms over the past five years. TRAI officials also said that if BSNL still wanted support for the rural phones then it could claim subsidy from the Universal Services Obligation Fund, which has in excess of Rs 10,000 crore in its kitty. Supporting TRAI’s proposed decision, private operators said ADC should have been done away with a year ago. They alleged that BSNL could be using the money collected as ADC to fund its expansion plans against private operators. “Why should the private operators pay for what BSNL is doing? It’s not fair in a sector that is governed by market forces. TRAI should stick to its plan for phasing out ADC this year,” said a GSM operator. BSNL contests 36% cut in access deficit charges ADC collections exceed target, cross Rs 8,000 cr TRAI to review access deficit charges again Access deficit charge: TRAI may issue show cause notice More Stories on : Telecommunications | Rural Development | Regulatory Bodies & Rulings
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