ISD rates set to fall

Outgoing international call rates are expected to fall 5 to 8 per cent effective April 1 following a cut in the access deficit charge (ADC) by the Telecom Regulatory Authority of India (Trai).

Meanwhile, private cellular service providers have complained that they have to pay a 25 per cent higher ADC than what their discussions with Trai had suggested.

The ADC is the charge private telecom operators pay state-owned Bharat Sanchar Nigam Ltd (BSNL) to cross-subsidise local calls and rural telephony operations.

Trai has withdrawn the ADC of Rs 0.80 per minute on outgoing international calls and reduced the ADC on incoming international calls from Rs 1.60 to Rs 1 per minute.

It has also reduced the telecom operators' percentage revenue share by 50 per cent from 1.50 per cent to 0.75 per cent on all national and international long distance calls.

These changes are expected to encourage operators to reduce telecom tariffs, increase phone usage and sustain telecom growth. The reduction in charges on incoming international long-distance calls is also aimed at eliminating the grey call market.

However, private telecom operators say the total ADC to be paid by the operators (Rs 2,000 crore) is higher than expected and unjustifiably boosts BSNL's profits.

S C Khanna, secretary general of Association of United Telecom Service Providers of India (Auspi), said, "We were expecting a waiver of ADC because BSNL has increased its profits as a result of this bonanza. However, Trai has merely decided to help us subsidise its profits."

Khanna said the decrease in the ADC on percentage revenue share would translate into a benefit of 2 to 3 paise a minute, which could not be passed on to customers on long-distance calls.

T V Ramachandran, director general, Cellular Operators Association of India, said, "It is unfortunate that despite the industry view that the domestic consumer should be spared the burden of ADC, nothing has been done on domestic telecom services. And a reduction in ADC on incoming international long distance calls does not benefit domestic customers."