ADC takes a political hue as MPs join issue

The issue of continuance of access deficit charge (ADC) is snowballing into a controversy, with 10 members of Parliament (MPs) taking cudgels against the Telecom Regulatory Authority of India (Trai) on its ADC consultancy paper.

The MPs, led by P S Gadhavi of Bharatiya Janata Party from Gujarat, have shot off a letter to the Union communications and information technology minister Dayanidhi Maran stating it "might become lopsided and urban-oriented" as the stress is laid only on mobile phones.

The letter also said even though BSNL collects Rs 5,000 crore as ADC per year and alleged that the process has "neither stability nor tranparency".

Moreover, ADC is revised every three to six months on the pretext of correcting the system, which has led to a frequent change in tariffs and confusion. The MPs also sought the government to look into the functioning of ADC.

"While we welcome the explosion in communications and technological developments in the various systems of communication, we apprehend that this development, if not properly and purposefully regulated, might become lopsided and urban-oriented," the letter, a copy of which is in possession of Business Standard, stated.

The letter further explained that if the stress is only laid on mobile phones, "which appears to be the case now", the objective of achieving increasing teledensity from the present nine per 100 people, reducing tariffs keeping in mind the common people and linking all villages with telephone connectivity would not be achieved in time.

This apprehension stems from the consultation paper recently floated by Trai, it said, adding, the regulator has also proposed that ADC on fixed wireless phones (FWP) of private operators will be only provided to Bharat Sanchar Nigam (BSNL). This means that there is no level-playing ground for the private sector, it said.

As FWPs are cheaper than mobile phones, both by tariff and equipment and are easy to deploy and operate, more people would opt for FWPs rather than mobiles, with the "benefit of ADC going to BSNL".

The letter also said that during the last few years there was a spurt in demand and preference of FWPs. "This is a sufficient justification for the government to modify its policy as to encourage people to go in for FWPs and for this purpose draw from ADC kitty to make them cheaper," it said.

The MPs were also in favour of FWPs, while they flayed mobile phones and were of opinion that cell phones were popular among youngsters and school-going children, despite health hazards.

Pointing to certain anomalies, the letter said with the proposed merger of BSNL and MTNL, the industry is apprehensive that a part of the ADC benefits would accrue to the latter also.

Trai has also admitted that BSNL has not provided any data on which it gets ADC and added that there is "neither stability nor tranparency" in the process.

The letter was also signed by MPs Rasa Singh Rawat (BJP, Rajasthan), D P Sabharwal (INC, Punjab), Kanshi Ram Rana (BJP, Gujarat) Mahesh Kanodia (BJP, Gujarat), Haribhai N patel (BJP, Gujarat), K B Krishna Murthy (INC, Karnataka), Alka B Kshatriya (INC, Gujarat), Prema Cariappa (INC, Karnataka) and Vallabhbhai Kathiria (BJP, Gujarat).

Reliance Infocomm has also opposed to continuing of ADC stating that the concept does not arise in the Indian context and has no economic rationale.

However, MTNL and Association of Unified Telecom Service Providers of India have favoured ADC in its present form, Tata Group and Videsh Sanchar Nigam (ADC on international calls should continue) and BPL (ADC funding should be provided only to BSNL for wireline subscribers in rural areas) have favoured ADC.

Spice Telecom (ADC should be provided to all operators offering fixedline services in rural areas) and Cell Operators Association of India (ADC should be provided only to BSNL for fixedline in rural areas) are also in favour of the regime.