Move to hike interconnect charges justified - BSNL

By Sandeep Dikshit

NEW DELHI, JUNE 6. Bharat Sanchar Nigam Ltd. (BSNL) has taken a tough stand in the latest stand-off with private companies which are protesting its move to hike charges for carrying the phone traffic of private companies on its network. In fact, according to officials, an aggrieved company has already approached the Telecom Regulatory Authority of India and a notice to BSNL in this regard is expected shortly.

Officials agree that the agreement for carrying another company's traffic, called interconnect agreement in technical parlance, falls within the purview of the TRAI and companies are free to approach the authority. But, the move to increase the interconnect charges has been not been correctly portrayed by the private sector.

The existing interconnect agreement was promotional in nature. It was basically offered to facilitate the entry of the private sector in basic phone services. Such a promotional measure cannot be continued in perpetuity. Officials say this aspect was explained to each phone company. They were also told that there are ``glaring discrepancies'' in the agreement and BSNL is incurring ``unjustified huge revenue losses'' which it cannot continue further.

The companies were told that ``the originating operator gets much larger share of the revenue compared to the work done by it while the other operator (BSNL) gets a much smaller share. It causes enrichment of the originating operator at the cost of the latter.''

For instance, a subscriber is charged Rs. 19.20 for a one minute call from Hyderabad to Chennai. Of this, the private company gets Rs. 11.52 for merely carrying the call from the subscriber's premises to BSNL's TAX in Hyderabad which amounts to a distance of 3 to 4 km. On the other hand, BSNL gets just Rs. 7.68 for carrying the call all the way from Hyderabad to Chennai and further carriage of 7 to 8 km in Chennai to the subscriber's premises.

The situation is worse in case of international calls. BSNL's share of revenue for per minute call to the U.S. is minus Rs. 2.92 during peak hours and minus Rs. 6.22 for off-peak hours. ``Thus BSNL incurs expenses from its own pocket for carriage of each outgoing international call,'' point out officials.

However, basic companies contend that there are several other issues at stake. The private companies operate in a controlled pricing environment and it would be unfair and inequitable to ask them to pay a greater share of revenue share towards interconnection charges. They also say it would be in the interest of all the parties to await the cost-based regime that the TRAI is now in the process of framing. Till then the interim arrangement prepared by the TRAI should be honoured.

To this arguement, BSNL has pointed out that Sec. 8 of the Telecom Interconnect Regulation issued by TRAI was quashed by the Delhi High Court. Hence, the overriding effect of the regulation with reference to specific provisions in the licence conditions is no more applicable.

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