Date:11/02/2006 URL: http://www.thehindubusinessline.com/2006/02/11/stories/2006021103440100.htm

Back STD calls for Re 1 from March 1

Our Bureau

TARIFFS DOWN: Mr A.K. Sinha (left), Chairman and Managing Director, BSNL, and Mr S.P. Sinha, Chairman and Managing Director, MTNL, at a press conference in the Capital on Friday. - Kamal Narang

New Delhi , Feb. 10

IT is the death of distance as far as telecom is concerned. The One India tariff plan, which will enable you to make STD calls for Re 1 a minute anywhere across the country, is finally here and will become operational from March 1.

Local calls too will now cost Re 1 for 3-minute duration. BSNL and MTNL today announced the new tariff plan, dropping STD rates by as much as 50 per cent for 35 million fixed line users and 15 million cellular subscribers.

Local call rates have been reduced by 17 per cent.

Local calls: Fixed line users who avail themselves of this plan will be able to make a three-minute local call to another fixed line phone or a WLL phone at Re 1.

All other calls, including local calls to a mobile user or STD calls to anywhere in the country, will be offered at Re 1 a minute under the new plan.

Comparatively, the existing plans offer local calls at Rs 1.20 for a three-minute call and the lowest STD rate available for BSNL's fixed line subscriber is Rs 1.20 per minute.

The flip side: The bad news, however, is that fixed line telephone users who avail themselves of the new One India plan will have to pay a higher monthly rental of Rs 299 and will get no free calls.

Existing tariff plans for fixed line telephones from BSNL carry monthly rental of Rs 180, while MTNL has a maximum rental of Rs 250 - which is bundled with 60 free calls a month.

BSNL said that through the plan it hoped to make fixed line phones more attractive and bring back the large number of subscribers who had surrendered their phones in recent years.

Mobile charges: For post-paid mobile users, BSNL-to-BSNL local calls will now cost 40 paise a minute.

All other calls including local calls to private operators' network and STD calls will be at Re 1 a minute for a monthly fee of Rs 299.

The average STD rate being charged by private operators at the moment is around Rs 2.40 a minute.

BSNL has also launched a new plan for pre-paid card users, which offers local calls within the network at 60 paise a minute.

All tariff plans from BSNL and MTNL currently on offer will continue to be available without any change.

`Scheme can be extended': The Communication and IT Minister Mr Dayanidhi Maran, who had proposed the One India concept last year, said that the announcement from BSNL and MTNL was only the beginning and the scheme could be extended to existing plans depending on the success of today's announcement.

Revenue loss: The immediate impact of the reduced tariff will be on BSNL itself, which stands to lose as much as Rs 3,000 crore in terms of revenue. While Mr A.K. Sinha, Chairman and Managing Director of BSNL, said that the losses would be adequately compensated by a 30 per cent increase in STD traffic, data released by the telecom regulator shows otherwise.

The share of STD calls as a percentage of the total outgoing minutes of usage per month per subscriber has, in fact, dropped to 17 per cent compared with 21 per cent a year ago even as the share of local calls has increased from 78 per cent to 81 per cent.

PCOs may be hit too: The other loser could be the PCO booth owner, who may find business unviable at such low tariffs.

Mr S.D. Saxena, Director (Finance) of BSNL, said that PCO booth owners would be given other sources of generating revenue as franchisee partners.

Private players wait and watch: Meanwhile, private operators including Bharti and Hutch said that they were studying the BSNL plan and would respond with their own version of One India soon.

Mr Vikram Mehmi, CEO of Idea Cellular, said that the company was awaiting lower carriage charges and the revised ADC regime to be announced by the TRAI next week.