Trai may offset extra ADC raised by BSNL

The Telecom Regulatory Authority of India (Trai) is exploring the possibility of offsetting the additional access deficit charge collected by Bharat Sanchar Nigam Ltd during 2005-06, by proposing proportionate deduction next year.

Trai is also examining legal obligations as both private operators and consumers could challenge in court the issue of being made to pay excess levy than the stipulated sum, sources said.

For telephone customers in the country, the additional ADC means that they had been forced to pay extra to the tune of Rs 3,000 crore to BSNL. ADC is a per minute levy that is charged on all long-distance calls to support BSNL's rural obligations.

"We are examining possibilities. The issue will be addressed in the new ADC regime that will be announced soon," Trai sources said.

While the total ADC collected by BSNL during the last year is yet to calculated, industry sources estimate it to be over Rs 8,000 crore, compared with Rs 5,340 crore that was set for the PSU.

Industry sources said the government was to blame for excess ADC to BSNL as the department of telecom (DoT) had embargoed the regulator from reducing this charge last year, and had even sought to take over Trai's regulatory powers in the matter.

The government had failed to budge, despite the warning from Trai Chairman Pradip Baijal in September 2005, that the existing regime would lead to excess collection and therefore must be reduced.

Baijal also pointed out that the current laws permitted to act on the issue.

The regulator had also mooted a 3-stage process to do away with the ADC regime by 2008-09.

According to the proposal, the first stage would see the present per minute system being reduced to revenue share model, before further reducing this levy Rs 2,007 crores in 2007-08 and finally dissolving the regime in 2008-09. But this proposal was turned down by the government.

Baijal had highlighted the importance of reducing ADC and had said "competing operators could not be expected to wait indefinitely for BSNL to undertake a rebalancing exercise and continue to subsidise the PSU for its fixed line operations during this period. This would inhibit growth, competition and a level-playing field in the sector."