Cellcos trip OneIndia

Private operators slash long-distance tariffs drastically.

Cellular operators look set to spoil the government's "OneIndia" party by slashing telecom tariffs even before the department of telecommunications (DoT) unveils its plans for uniform call rates across the country.

While operators like Hutch and Idea have already cut domestic long-distance tariffs in select markets, Bharti and state-run Bharat Sanchar Nigam Ltd are planning to match the new rates.

Hutch slashed tariffs to 75 paise per minute for calls to any private GSM operator for its subscribers in Delhi and the National Capital Region, while for its Mumbai subscribers, the Hutch-to-Hutch call rate was reduced to Re 1 per minute.

Last month, Idea Cellular had slashed rates to 99 paise per minute for calls to private GSM mobiles in these circles. "These reductions will be extended across the country in the near future," said an executive of a company that is expected to reduce tariffs in Delhi over the next few days.

The next round of reduction in the access deficit charges (ADC) is also slated to commence shortly. "The reduction in ADC levy will happen before the OneIndia plan is announced. The ADC reduction will lead to further reduction in cellular tariffs. The policy, when announced, will therefore not affect cellular companies, but create extensive losses for BSNL, as it will force it to reduce tariffs for landline subscribers," said an industry analyst.

While BSNL executives maintain that the company is yet to make an estimate of the losses it is likely to incur, they admit the implementation of the policy, coupled with the new ADC regime, will be a double blow to its revenues.

In what can be another blow to OneIndia, the government cannot intervene if private players decide to charge higher rentals in lieu of lower call rates. For instance, Hutch's new plan comes with an additional rental of Rs 25 a month in Mumbai and Rs 30 a month in Delhi.

If cellular operators play spoilsport, the government is likely to face more trouble on local access. Under uniform rates, the pulse rate was defined for the 60-second slab, but the present slab is for 120 seconds.

"Reducing the pulse rate for local access to subsidise STD calls defeats the purpose of the policy," said a BSNL executive. Local calls account for over 60 per cent of BSNL's revenues.