Long-distance calls may cost a third less

Access deficit levy cut, BSNL to take Rs 2,000cr hit.

National and international long-distance call charges are set to fall by a third as the Telecom Regulatory Authority of India today announced a sharp cut in access deficit charge "" a levy paid by telephone users to fund Bharat Sanchar Nigam Ltd's rural telephony. BSNL is likely to suffer an annual revenue loss of about Rs 2,000 crore due to this cut.

For STD calls, Trai has said that telecom companies will pay 1.5 per cent of their annual adjusted gross revenue as ADC against 30 paise per minute at present. Operators' revenue from rural subscribers will be exempted from revenue-share.

Trai has retained the per-minute ADC for international calls, but reduced it to 80 paise per minute for outgoing calls and Rs 1.60 per minute for incoming calls. In addition, international long-distance operators will share 1.5 cent of revenue as ADC.

The new norms come into effect on March 1 and will reduce the total ADC amount to Rs 3,335 crore from about Rs 5,340 crore at present.

According to Trai estimates, of the Rs 3,335 crore ADC collection, BSNL will get only Rs 3,200 crore, as private operators have been allowed to retain the ADC they collect on all STD calls and outgoing international calls from their fixed-line customers.

Trai also added that the ADC regime would be eliminated by 2008-09.

The regulator also set a ceiling on carriage charges for domestic long-distance calls at 65 paise per minute, against the current ceiling of Rs 1.10 per minute. But the call termination charge has been retained at 30 paise per minute.

"The main thrust of this regulation is to give further relief to domestic consumers," Trai said in a statement. More importantly, the reduction will enable all operators to roll out OneIndia tariffs for STD calls at Re 1 per minute.

All leading private operators, including Bharti, Reliance Infocomm and Idea Cellular, have said that the reduction will be passed on to subscribers. Telecom industry analysts have estimated that if the entire reduction is passed on to subscribers, STD tariffs can reduce by up to 35 per cent and ISD by about 25 per cent.

On BSNL suffering an annual revenue loss of about Rs 2,000 crore, Minister for Communications and Information Technology Dayanidhi Maran said the PSU had taken this factor into account before announcing its OneIndia tariffs.

"The prescription of a 1.5 per cent revenue represents a significant reduction of the ADC burden on the industry and in turn, on consumers. This will reduce telecom tariffs across the board, and will facilitate the offer of competitive OneIndia tariffs by all private operators," said TV Ramachandran, director-general, Cellular Operators' Association of India, a body representing all GSM players.