Date:07/01/2005 URL: http://www.thehindubusinessline.com/2005/01/07/stories/2005010702600100.htm

Back Long distance calls to cost less on ADC cut

Our Bureau

New Delhi , Jan. 6

In a New Year bonanza, over 90 million telecom subscribers will get lower long distance tariffs from February with the Telecom Regulatory Authority of India (TRAI) reducing the Access Deficit Charge (ADC) by up to 62 per cent.

While domestic long distance call tariffs, for both fixed and cellular phones, will be lowered by up to 50 paise a minute, international long distance calls are likely to be reduced by about Rs 2 a minute. There will be no change in local call tariffs.

TRAI, on Thursday, reduced the ADC component on STD calls from 80 paise a minute to 30 paise a minute for calls made over 200 km and from 50 paise a minute to 30 paise a minute for calls made between 50 km and 200 km.

This means a call between Chennai and Delhi that was costing an average of Rs 2.40 a minute will now cost Rs 1.90 a minute.

On outgoing ISD calls, TRAI has brought down the deficit charges by 41 per cent to Rs 2.50 a minute from Rs 4.25.

The reduction in the charges could lead to a corresponding slash in the ISD tariffs.

Thus, a call to the US that now costs an average of Rs 16 a minute may now be brought down to around Rs 14 a minute. The exact reduction will be clearer once individual operators announce the revised tariffs.

Deficit charges on incoming calls have also been decreased from Rs 4.25 a minute to Rs 3.25 a minute.

The move is aimed at addressing the grey market on incoming ILD calls, which recently blew up into a major controversy after Reliance Infocomm was charged with routing ILD calls like local calls.

Reacting to the new ADC regime, Mr Sunil Mittal, Chairman and Managing Director, Bharti Group said, "These cuts will be passed 100 per cent to the subscribers as and when they are applicable. The cut has been mainly in the area of long distance. As per our promise our customers can expect cut in these segments from February 1."

TRAI has also kept the total quantum of the fund collected from ADC at last year's levels of Rs 5,300 crore.

It said that the increase in usage will compensate for the reduction in the per minute charges.

"The increase in subscribers was 100 per cent by September 2004 and is likely to be about 230 per cent by 2005. Hence, it is possible to collect a given ADC amount with a lower charge per minute," said Mr Pradip Baijal, Chairman, TRAI.

BSNL, which receives more than 90 per cent of the ADC for offering cheap rural telephone services, had cautioned that it would have to increase the fixed line tariffs if the quantum was reduced.

Mr Baijal also said that changeover to revenue share regime where the ADC is collected as a percentage of the operators annual revenues would be looked at a later stage along with the option of merging it with the Universal Services Obligation Fund, set up for financing rural telecom projects.