Date:21/07/2004 URL: http://www.thehindubusinessline.com/2004/07/21/stories/2004072101140500.htm

Back BSNL told to justify access deficit charges

Our Bureau

"The current regime is unfair because a fixed line phone used by a consumer in the posh Prithvi Raj Road in Delhi is being subsidised by a mobile-using vegetable vendor."

New Delhi , July 20

PRIVATE telecom operators and consumer groups, on Tuesday, came down heavily on Bharat Sanchar Nigam Ltd's claims for access deficit charges and urged the telecom regulator to restrict the subsidy only to the 8 million rural telephones.

In an open house organised by the regulator, operators said that the move would reduce the burden on operators from Rs 5,000 crore to about Rs 500 crore which will result in further reduction in tariffs. As per the current policy all of BSNL's 40 million fixed line telephones are covered under the access deficit regime.

Strongly opposing the TRAI move to extend the subsidy support to BSNL for another two years, private operators said that the regulator was playing into the hands of the state-owned company which was using the accruals from deficit charge to fund commercial rollout plans.

BSNL was conspicuous by its absence as none of its officials were present at the open house discussion.

Mr S.C. Khanna, Secretary General of the Association of Unified Telecom Service Providers of India, said, "BSNL has been unfairly using these payments received to price its services way below sustainable levels. The USO (Universal Service Obligations) fund is adequate enough to cover any access deficit. If BSNL is given ADC (access deficit charges) then even private fixed line operators should also be given support."

Mr T.V. Ramachandran, Director-General, Cellular Operators Association of India, said: "As per our estimates there is no element of subsidy any more. ADC should be done away with. But even then if the TRAI wants to give support to BSNL, then it should be restricted only to the phones which are loss making. MTNL which operates in the lucrative markets of Delhi and Mumbai should not be given ADC."

Pointing out an anomaly in the current regime, Mr Virat Bhatia, Managing Director, Corporate Affairs, AT&T India, said, "The current regime is unfair because a fixed line phone used by a consumer in the posh Prithvi Raj Road in Delhi is being subsidised by a mobile-using vegetable vendor." Operators pointed out that the growth in subscribers base has dipped from 2 million a month to 1 million ever since the deficit charge was imposed.

Mr Anil Jain of Telecom Watchdog, a consumer group, said that the TRAI must ask BSNL to come clean on accounting separation which will make clear the extent of the subsidy required.