ADC may be cut: Trai

The Telecom Regulatory Authority of India will issue a consultation paper on access deficit charge (ADC) within the next 15 days, Chairman Pradeep Baijal said in Mumbai on Tuesday.

"We will review the ADC in the next few days. It is possible that a reduction may be proposed," Baijal said. Trai will again review the situation after 6 months.

The regulator is looking to phase out the ADC in the next 3-5 years. "We are already committed to phasing out the ADC in 3-5 years. It can happen earlier also, depending upon how the cost behaves," Baijal said.

"We would be happy to remove the ADC completely within a year but then the tax payers will have to bear the losses incurred by players like the Bharat Sanchar Nigam Ltd.," he added.

Last month, the TRAI had slashed ADC on domestic and international long-distance calls by about 50 per cent. ADC is levied on all calls and is handed over to operators providing services in rural areas.

The telecom regulator is also in the process of issuing orders for cutting both international and domestic leased line tariffs.

"We have a huge overcapacity of bandwidth and yet the tariffs are not coming down. This indicates that the natural market forces are not working. Therefore it is imperative to cut the leased line tariffs. We are likely to issue an order in the next 10 days," Baijal said.

Baijal further said that the Tata group and Reliance have objected to TRAI's move on the issue on the grounds that the regulator does not have a legal basis for reducing the tariff.

"TRAI has checked this issue in other parts of the world and has found that regulators have intervened in such matters. Hence, we are very clear that we can also intervene in this matter," he said.

TRAI is also likely to issue a guideline on the Spectrum issue within 10 days. Spectrum is the distribution of wavelengths and frequencies.

In its first consultation paper, TRAI had recommended that spectrum fees should be based on the amount of spectrum assigned to an operator rather than the level of revenue and the number of subscribers.