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G. Rambabu

New Delhi , Oct. 22

THE Telecom Regulatory Authority of India (TRAI) has decided to reduce the access deficit charge (ADC) component for long distance calls in the revised interconnection usage charge (IUC) regime that is to be introduced shortly.

This could lead to a further reduction in ISD and STD call charges of private basic operators, even as Bharat Sanchar Nigam Ltd (BSNL) suffers a dip in its revenues from interconnection.

In an internal note of the TRAI which has been prepared for a meeting to finalise certain aspects of the revised IUC before making them public, it has been stated that "the net ADC amount to be funded by long distance calls is much lower than the amount estimated earlier, and this implies that the long distance calls can now be cheaper because the load imposed by this component would be lower."

The ADC as it is levied at present is the difference between the cost incurred by BSNL to provide fixed line services and the amount charged from the subscribers. Since the rentals and the call charges are below cost, the ADC which is imposed on the private operators, is meant to compensate BSNL for keeping the service affordable and incurring this extra expenditure. This component is incorporated in the overall interconnection charges that the private operators have to pay BSNL for linking up with its network for local, STD and ISD calls made by their subscribers. As a result, any decline in this component will give the private operators that much more flexibility to reduce rates, while BSNL will suffer a corresponding decline in revenues.

While the reduction in the ADC on STD calls will have an immediate impact on the rates being offered by the private operators, the impact on ISD rates will take much longer. The TRAI note takes the view that even as the ADC on ISD calls of Rs 5 per minute that is levied at present is high, they will continue to be higher than that imposed on STD calls.

"The Authority has decided to reduce ADC component for ILD calls taking account also of the importance of such ADC in meeting tele-density targets. The Authority also noted that the ILD tariffs have traditionally been high and the ADC component for ILD may be different and higher than that applicable to national long distance calls," the internal paper notes.

The reason why any decline will not have an immediate impact on ISD prices is because of the absence of the carrier access code (CAC) whereby a subscriber can choose his or her ILD operator. Since the deficit charge for international calls is levied only on the originating and terminating networks, BSNL continues to corner most of the revenues on this account.

Once the CAC regime is in place, and a BSNL customer wants to use the ILD network of a private operator, say Bharti, the calls could cost much lesser, as Bharti will have to pay a lesser interconnection charges and can pass on the benefit to subscribers.

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