The Telecom Regulatory Authority of India (TRAI) this week announced a new access deficit (ADC) regime which it claims will offer a bonanza to consumers by way of lower long distance and international call tariffs. But T V Ramachandran, the director general of the Cellular Operators Association of India(COAI), makes a scathing attack on TRAI, saying that consumers are again being left high and dry. Excerpts.
Will the new ADC regime lead to a cut in tariffs for customers?
The new regime provides only small benefits to the customers. To understand this, one must appreciate the fact that the huge benefit in the very high volume of incoming international calls accrues only to international carriers and to ILDOs (they have reduced the ADC on incoming ILD calls from Rs 4.25 to Rs 3.25).
The Indian consumer anyway pays nothing for these calls and has no interface whatsoever with the international operator or the ILDO. You must remember that the ratio between incoming and outgoing is at 4:1. The Indian consumer relates only to the access provider.
If the access provider had been given a higher termination charge concomitantly, then the consumer would have received rich benefits from his access provider in this fiercely-competitive market. Regrettably, the new regime has not done this despite our strong representations.
In the outgoing international calls, while tariffs will go down, again it is not substantial. Average ILD outgoing tariffs are around Rs 15 a minute so the benefit as a result of the reduction of ADC will be around 10 per cent on an average. In markets like US it will be over 20 per cent.
Instead, there is just a minor tweaking of the domestic calls ADC from the current weighted-average value of about 45 paise to a flat 30 paise. A mere pittance as compared to the bonanza to the international carrier/ ILDO.
The point here is that only 20 per cent of the domestic outgoing calls are above 200 kilometers where the ADC has been reduced from 80 paisa to 30 paisa. So local calls will not be substantially lower at all.
Will the new regime discourage call rerouting which has become a big issue where companies have rerouted international calls in the garb of a local call?
We are greatly disappointed that despite strong representations from many quarters and despite the serious shortcomings of the existing system being painfully evident to all, a flawed regime is being continued.
The basis and mechanism of ADC should have been changed to eliminate the obvious arbitrage flaw which was, and continues to be, an invitation to bypass the correct process of call routing.
Earlier, the quantum of arbitrage benefit was potentially about Rs 40-odd crore per month for a typical ILD operation having about 100 million incoming ILD minutes per month. This has been revised to Rs 3.25per minute now.
Hence the potential arbitrage benefit will be Rs 32.5 crore per month. Still a huge benefit! Moreover, traffic volume has surely increased from 100 million minutes, a year ago, to maybe 130 million minutes or so. The arbitrage operator is obviously laughing all the way to the bank!
What are major flaws of the new ADC regime?
I think I could list out a few: a) Continuance of a large arbitrage opportunity;
b) It is anomalous and illogical to provide any ADC to MTNL or private fixed operators on outgoing calls. These operators do not have rural rollout obligations like BSNL.
The ADC on incoming calls has rightly been eliminated for these operators, but it is baffling to note the anomalous retention on outgoing calls;
c) Fixed service operators are deploying fully mobile options like 'Walky's' and 'Unlimited Cordless'. ADC for these are clearly travesties of the rightful regime. Stopping these advertisements is not a correction of the flaw.
