OneIndia plan caught in rural-urban divide

Uniform tariffs may push up rural phone bills by 50%.

Communications Minister Dayanidhi Maran's much touted OneIndia plan of uniform tariffs across the country may lower the call rates for urban India but may push up rural India's telephone bill by as much as 50 per cent.

The government intends to retain the current tariff of Rs 1.20 for a three-minute local call (40 paise per minute) across all regions, which would mean a 50 per cent increase in tariffs for rural customers, who, at present, pay a subsidised tariff of 80 paise.

According to sources in the state-owned telecom companies, even at Re 1 , rural India's cost per call will increase 20 per cent, while the urban consumers would be paying 20 per cent less than the existing tariff.

As a third of BSNL's customers are from rural areas, the policy can result in 15 million users paying higher tariffs for local calls.

"The argument that long-distance will be cheaper does not apply here, as 75 per cent of BSNL's rural subscribers have not opted for STD facility," said a company executive.

According to BSNL sources, the PSU was also not in a position to revise the pulse rates for local calls or increase rentals under the policy as this would result in higher tariffs for subscribers in both urban and rural India, with the latter bearing the brunt.

OneIndia will also result in both BSNL and Mahanagar Telephone Nigam Ltd (it operates only in Delhi and Mumbai) having to rework their schemes for users who pay higher rentals to avail discounts on the local call rates.

If uniform tariffs are in place, the PSU may not be able to continue these schemes, BSNL sources said. Yet another issue that confronts BSNL is the fact that it has over 2.2 million STD booths across the country.

"Uniform STD tariffs of about Re 1 per minute will mean that commissions will become minimal and, even after improved traffic, it will become difficult to sustain this business model," the BSNL official added.

BSNL had earlier said that it would face a revenue loss of about Rs 4,500 crore in the first year if OneIndia was implemented.

WHAT AILS ONEINDIA

Some private players have already slashed tariffs to levels proposed by the policy

Telecom tariffs in rural India may increase on account of revised local call rates

BSNL and MTNL may have to rework their schemes for users who pay higher rentals to avail discounts on the local call rates

STD booths may become non-profitable

BSNL faces a revenue loss of about Rs 4,500 crore in the first year