The Hindu Business Line : BSNL may get relief for rural phone burden

Option lines
Giving Rs 2,000 cr to BSNL from the USO fund.
Providing difference between cost-based rentals and those actually charged.
Lowering BSNL’s contribution to USO fund.

Thomas K. Thomas

New Delhi, June 5 The Department of Telecom is looking into a proposal to compensate Bharat Sanchar Nigam Ltd for the telecom regulator’s decision to withdraw subsidy on rural telephones given in the form of access deficit charge. DoT is considering a move to make up for the losses through a three-pronged formula including exempting BSNL from paying towards Universal Services Obligation fund and from paying licence fee for rural fixed line telephones.

BSNL has sought a compensation of Rs 13,800 crore per annum for offering lower tariffs for its fixed line telephone subscribers in rural areas. ADC was levied by Telecom Regulatory Authority of India (TRAI) in 2003 to provide support for BSNL’s rural telephone obligation.

BSNL offers these services at subsidised rates in line with the Government’s policy of providing affordable communication services in rural areas. However, with TRAI abolishing ADC this year, BSNL has threatened to either raise tariffs for the rural subscribers or pull the plug off all loss-making telephone lines.

Finding a solution

Since both these options are not acceptable to the Government, DoT is looking at various options to compensate the PSU.

One of the options is to provide Rs 2,000 crore to BSNL from the Universal Services Obligation (USO) fund for the next three years. This was also suggested by TRAI while withdrawing ADC. DoT is also looking at providing for the difference between the cost-based rentals prescribed by TRAI and the rentals actually being charged by BSNL from its rural subscribers. This will cost Rs 854 crore, which DoT will take from the USO fund.

BSNL may also get exempted from contributing towards the USO fund. TRAI has recommended an exemption of 2 per cent of the annual revenue for operators who have covered 75 per cent of development blocks. Since the company is the largest provider of universal services in rural, remote, inaccessible and hilly areas including islands, DoT may lower the contribution to the USO fund.

DoT may also exempt BSNL from paying licence fee on revenues earned from fixed line telephone services.

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