The Hindu Business Line : Access deficit charge only on incoming ILD calls likely

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New Delhi Feb. 2 Setting in motion a process for another round of tariff reduction, the Telecom Regulatory Authority of India has issued a consultation paper to review the Access Deficit Charge (ADC) regime for 2007-08.

One of the options discussed by the telecom regulator is to put the entire burden of ADC on incoming international long distance calls, in which case Indian subscribers will be freed from paying the levy. ADC is a levy imposed by TRAI to subsidise telephone services in the remote areas of the country. Since State-owned BSNL has the largest number of rural telephones, the entire amount collected through ADC is passed on to it.

TRAI has suggested several other options to reduce the overall subsidy including keeping the current system of recovering ADC from ILD incoming and outgoing calls on per minute basis and a percentage revenue share from other telecom services, though at a reduced level.

At present, operators pay 1.5 per cent of their annual revenues to the ADC kitty in addition to a per-minute-rate on ILD calls.

While TRAI's intention of lowering the subsidy amount will benefit subscribers, ILD operators are not too happy with the idea of loading the entire burden on international calls.

BSNL is also not happy over the prospect of lowering subsidy.

While BSNL has already filed an appeal against the TRAI move, the telecom regulator said that it had earlier been decided that the subsidy would be brought to zero by 2008-09 and there was no going back on it.

TRAI said if subsidy was still required after the set deadline, the Government could make provisions from the Universal Services Obligation fund.

TRAI has sought the views of various stakeholders on all the issues but said that reduction in ADC after due consultation would pave the way for lower telecom tariffs and sustained growth.

At present the estimated ADC for 2006-07 is Rs 3,335 crore, which is expected to come below Rs 2,000 crore.