Trai slashes ADC, calls to become cheaper

Telecom tariffs are set to fall significantly as sector regulator Telecom Regulatory Authority of India (Trai) today announced a cut of more than 37% in the levy paid by private players to BSNL for providing services in rural areas effective April 1, 2007.

"The total amount of levy (Access Deficit Charge) for the financial year 2007-08 is reduced to approximately Rs 2,000 crore from the existing level of Rs 3,200 crore," Trai said in a statement here.

International long distance (ILD) calls are likely to become cheaper as the levy on such calls has been completely removed as against 80 paise charged now.

All private operators pay ADC to BSNL for carrying out social obligations like providing services in unremunerative and rural areas.

"The Authority expects the reduction in ADC amount, resulting from today's order, would be passed on fully to the consumers by the service providers," the release added.

Trai also reduced the levy on incoming ILD calls to Re 1 from the existing Rs 1.60 per minute.

The ADC on percentage revenue share basis of the telecom operators has been reduced by 50%. "Telecom operators would now have to pay 0.75% of their adjusted gross revenues towards ADC from existing 1.50%," the release said.

Trai said ADC is a depleting regime and should be merged with Universal Service Obligation fund if considered necessary by the Department of Telecom.