The Hindu Business Line : International long-distance calls turning cheaper

Right number
Levy of 80 p on outgoing ILD calls removed
TRAI halves levy on local, STD calls
Charges on incoming ILD calls cut to Re 1
BSNL to get Rs 2,000 cr from funds collected

New Delhi March 21 Telecom tariffs are set to fall further with the Telecom Regulatory Authority of India (TRAI) announcing a 36 per cent decrease in the access deficit charges (ADC), a levy paid by telecom operators to subsidise rural telephony in the country.

The total subsidy amount has been brought down from Rs 3,200 crore in 2006-07 to Rs 2,050 crore for 2007-08.

The biggest impact of this will be on the outgoing international long-distance (ILD) segment, as the levy of 80 paise per minute has been removed, which means that consumers can make ILD calls at rates cheaper to that extent.

For instance, a call to the US, which cost Rs 7.20 a minute till now, will be available for Rs 6.40 from April 1 when the revised charges take effect.

However, the impact on domestic calls will be marginal even though TRAI has reduced the levy on local and STD calls by half, from 1.50 per cent of the operator's annual revenues from domestic calls to 0.75 per cent.

While the annual burden on Indian operators has reduced from Rs 1,276 crore to Rs 650 crore, the impact on per minute charges will be less than 10 paise a minute.

Operators said that they would pass on the benefits from the reductions but expressed unhappiness with the TRAI decision to retain ADC on domestic calls.

"We were expecting a 50 per cent reduction in the overall subsidy amount and a complete removal of charges on domestic calls," said Mr T.V. Ramachandran, Director-General, Cellular Operators Association of India.

TRAI has also reduced the charges for incoming ILD calls from Rs 1.60 per minute to Re 1.

While this will not benefit users in India, the move is aimed at reducing arbitrage on incoming international long-distance calls, and in the process reduce incentives for grey market operators.

This will also benefit international carriers like AT&T and BT, which will now have to pay Rs 1,400 crore annually instead of Rs 1,800 crore.

The biggest gainer among the operators will be BSNL, which will get Rs 2,000 crore from the funds collected.

"ADC is not relevant anymore when BSNL's profitability has doubled," said Mr S.C. Khanna, Secretary-General, Association of Unified Telecom Service Provider of India.

BSNL, however, is peeved that its share has come down by Rs 1,000 crore.

TRAI has sought to put the ball in the Government's court.

"The authority has already communicated to the DoT that it may like to consider further course of action in view of the fact that the ADC is a depleting regime. Therefore, any subsequent action in this regard will be from the DoT," it said.

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