The Hindu Business Line : TRAI does a rethink on phasing out access deficit charges

While the levy in its existing form, whereby operators pay a percentage revenue share, may be phased out, the regulator has called the telecom industry for a meeting on Tuesday to discuss an alternative model of imposing the charges to fund roll out of rural telephones.

Earlier the telecom regulator had said that ADC would end by 2008.

However, political compulsion seems to be forcing the TRAI to continue with the levy for another year at least. According to top Government sources, the method of imposing the levy could change from the current format.

At present, operators pay a percentage of their annual revenues as ADC.

New models

One of the new models being proposed by the TRAI is to impose the levy in the form of discounts worth Rs 200 to each rural subscriber.

The model has not been finalised and will be discussed with the operators on Tuesday.

ADC was imposed on the telecom operators by the regulator to subsidise services in rural areas. Since Bharat Sanchar Nigam Ltd has the largest number of rural subscribers, more than 90 per cent of the fund collected was passed on to the State owned company.

While BSNL is in favour of an extension, private mobile operators are opposed to continuing the levy.

“There is no justification to continue the ADC regime any more. TRAI should stick to its commitment of ending the charges by April 2008. Private operators should not be asked to fund BSNL’s expansion plans under any circumstances,” said a private cellular operator.

“The TRAI had itself said in its consultation paper that ADC was not required any more. It had given mathematical calculations to justify the end of the regime. We don’t think there is any rationale to subsidise rural telephony any more as operators are themselves rolling out services in these areas,” said an industry representative.

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