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VSNL long distance calling cards illegal, rules TDSAT

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VSNL sees no impact on its finances

Our Bureau

`This service can only be provided under the basic service operator or unified access service licence.'

New Delhi, May 26

The Telecom Dispute Settlement Appellate Tribunal (TDSAT) on Friday ordered that the long distance calling cards sold by Videsh Sanchar Nigam Ltd was illegal, as it was not permitted under its licence. TDSAT said that calling cards could be issued only by access providers.

The decision comes after Tata-managed VSNL challenged an order by the Telecom Regulatory Authority of India asking it to stop selling the calling cards.

Dismissing the VSNL appeal, TDSAT said, "We have come to the conclusion that the appellant is not authorised to provide the service of calling cards for making out-bound long distance calls under the conditions and clauses provided by national long distance or international long distance licence. This service can only be provided under the license of basic service operator or unified access service licence."

Responding to the order, VSNL sources said that it had stopped offering calling cards almost a year back and therefore, there would be no impact on the company's finances.

Sources, however, said that if the order had gone in favour of VSNL, there could have been cheaper option for consumers to make long distance calls.

Earlier, TRAI had said that VSNL was avoiding payment of access deficit charges (ADC) for the calls made from calling cards.

Supporting the TRAI observations, the tribunal said "We also find that the revenue generated by the appellant and also the access deficit charge are retained by it because it is on a tax holiday for two years. The licensee is under obligation to pay a part of the revenue generated as licence fee. Had the licensee introduced this service through the access providers of the same group of companies (Tata Teleservices), the revenue generated as also the other charges like ADC would have been paid."

(This article was published in the Business Line print edition dated May 27, 2006)
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