Rs 4,000 crore dilemma for Raja

Communications and IT ministry's new incumbent A Raja is sitting on a Rs 4,000-crore dilemma.

If he implements former minister Dayanadhi Maran's plan to abolish domestic roaming charges, subscribers will cheer him, but he will also earn the ire of telecom companies.

Abolishing roaming charges will reduce subscriber bills by 28-58 per cent. But telecom operators will collectively take a Rs 4,000-crore hit to their bottom-lines.

Maran's proposal was to have been implemented on June 3, to coincide with the birthday of his grand-uncle and DMK chief M Karunanidhi.

State telecom companies BSNL and MTNL are waiting for orders from Raja, who was in meetings with their top executives today. "Such schemes are in the pipeline and could be a reality soon," said a senior BSNL official.

However, in his first press briefing after being appointed Maran's successor, Raja was non-committal. "We will look into the matter," was all he said.

The proposal follows a 25-56 per cent cut in roaming charges announced by Telecom Regulatory Authority of India (TRAI) in January this year.

Under the new dispensation, users who travel from, say, Delhi to Mumbai are charged Rs 1.40 for an intra-city call and Rs 2.40 for domestic long-distance calls. If roaming charges are abolished, they will pay Re 1 for an intra-city call and Re 1-2 for a national long-distance call.

Telecom service providers, which took a Rs 900 crore hit then, are unwilling to take another reduction.

"Roaming charges account for 10 to 12 per cent of our revenues, so the move could have a major impact on our bottom-lines," said T V Ramachandran, director general of the Cellular Operators' Association of India.

"The power to fix tariffs lies with TRAI and no minister can dictate terms to the entire industry," added S C Khanna, secretary general of the Association of United Telecom Service Providers of India.