Trai for separate service accounts

The Telecom Regulatory Authority of India (Trai) has made it mandatory for telecom service providers to submit separate accounting statements for each services and products in every licensed areas.

The move is aimed at addressing the concerns over cross-subsidisation and eliminate predatory pricing by large telecom companies.

The Trai has also asked operators to submit yearly reports revealing details of cost of capital employed, network architecture, capacity, volumes and future roll out plans.

The new regulation will be applicable to all service providers including cellular operators, VSAT providers, Internet service providers (ISPs), paging, mobile trunking radio, basic operators and long-distance operators.

"The move will help the Trai to monitor and measure financial performance of individual telecom products/network services and information about desegregated costs of various network elements.This would also help generate accurate information necessary to decide interconnection usage charges and access deficit charges," a Trai statement said.

Accounting separation has been a much awaited move by most private telecom operators as they felt that Bharat Sanchar Nigam Ltd was cross subsidising its services to offer anti-competitive tariffs.

"BSNL offers a wide range of services like cellular, fixed, long-distance and Internet. The new Trai regulation will make sure that BSNL and other large operators do not use profits from one segment of business to subsidise another," said a cellular operator.

One of the concerns of the private operators was that the Rs 5,000-crore access deficit charge accruing to BSNL for offering rural telephony may be used by the PSU to cut competition in the cellular business.

BSNL has, however, always maintained that its books were clean and transparent.

As per the Trai guidelines, operators would have to submit reports service- wise, geography-wise and product-wise.

This means a company like Bharti will have to submit reports for each of its telecom business, for each of the 17 circles where it operates and for each of the products, like pre-paid and post-paid mobile market.

Some operators said the details asked by the regulator would mean giving out market sensitive information in a competitive environment.

The Trai has, however, assured confidentiality.