'MTNL's fears on ADC not true'

Regulator denies MTNL's charge that it will take a hit of Rs 400 crore

The Telecom Regulatory Authority of India (Trai) today said the Mahanagar Telephone Nigam Ltd's (MTNL) fears that the reduction in the Access Deficit Charge (ADC) will cause a loss of over Rs 400 crore were unfounded.

The Trai pointed out that MTNL had not been totally deprived of ADC -- it was retaining ADC on its outgoing calls. With "substantial and sustained subscriber growth", the state-owned service provider will be able to generate the same amount of money, if not more, from just outgoing calls, said Trai Member DPS Seth.

"Our calculations show that as the traffic increases, the number of minutes that fund ADC will increase too, and the total amount and MTNL's share of it will remain unchanged," said Seth.

The regulator estimates that the outgoing minutes of usage on wire lines will rise by over 10 per cent to cross 610 minutes per month by January, 2006. At present, it is estimated at 550 minutes.

In case of mobile phones, usage was estimated to cross 500 minutes a month by January 2006 against 300 at present.

Retention of the earlier ADC regime will only create a scenario where "other fixed line players" (non-BSNL) will get extra deficit charges, which will be more than the share due to them, Seth said.

He also said since ADC was calculated on an annual basis, the regulator was confident that this amount raised by February 2006 will be equivalent to that collected under the earlier regime.

"Besides, we will also examine the implementation of the new rates with the latest information after three to six months and take necessary steps," he added.

MTNL's grievance is two-fold: the overall reduction in ADC and also the fact that only BSNL will be able to receive ADC on all incoming calls.

The company's Chairman and Managing Director RSP Sinha said: "We have not taken up the issue with the Telecom Dispute Settlement Appellate.

But, we will be doing it in the next couple of days and will seek a stay in the implementation of the new ADC regime from February 1."

According to him, it was discriminatory on part of the regulator to differentiate between the two public sector service providers.

"In principle, this is wrong,'' he said.

Talking at cross-purposes

MTNL CMD R S P SINHA: "In principle it is wrong to differentiate between BSNL and MTNL on ADC. Our estimated loss is over Rs 400 crore. MTNL will approach TDSAT over the next couple of days to obtain a stay."

BSNL CMD A K Sinha: "We face a loss of Rs 1,254 crore with the ADC cuts. BSNL may therefore be forced to review some economically unviable projects - this will impact our development activities and also effect rollouts in rural areas."

TRAI CHAIRMAN, PRADIP BAIJAL: "The increased usage will compensate for the reduction in per minute ADC charges. The total ADC generated will continue to remain the same.''