a major policy change, the telecom regulator TRAI
has changed the Access Deficit Charge (ADC) calculation
from per minute of call basis to percentage of revenues.
ADC would hence forth be charged at the rate of 1.5
per cent of gross revenues. The new regime would be
effective from 01 March 2006.
a result of the change, total ADC amount for the financial
year 2006-07 would decline to Rs3,335 crore. Out of
this, an amount of around Rs3,200 crore would be due
to BSNL. Based on the existing method, total ADC for
the year would have been Rs4,800 crore, according
to a TRAI statement.
private fixed line operators would not have to pay
any ADC on their revenues from rural areas.
ADC on international long distance calls have been
reduced by more than half, though the computation
would continue to be on per minute of call basis.
On incoming calls an ADC of Rs1.6 per minute would
be applicable while outgoing calls would attract a
lower rate of Rs0.80 per minute.
estimates total ADC of Rs1,278 crore from domestic
calls, Rs1,800 crore from international incoming calls
and Rs257 crore from international outgoing calls
for the year 2006-07.
significantly, TRAI has said that there would be no
ADC by the financial year 2008-09.
is levied to subsidise the lower than cost monthly
rentals and local call charges for domestic fixed
lines, mostly of BSNL.
TRAI has also fixed a ceiling for domestic carriage
charges at Rs0.65 per minute irrespective of the distance.
This is seen as a move to facilitate the migration
to the 'One India' uniform call tariff initiative
of the telecom ministry.
charges, the share of call charges due to the operator
at the call termination point, would remain the same
at Rs0.30 per minute for both fixed line and mobile
networks. Interestingly, the regulator has stated
that termination charges can be lower than the current
level without changing the rate.
telecom operators are expected to bring down tariffs
after the reduction in ADC. Bharti-Airtel has already
declared that the entire reduction would be passed
on to customers.
the rates have been reduced, it may not affect BSNL
considerably as volume growth would result in higher
revenues. It is estimated that ADC due to BSNL for
the current year 2005-06 would be considerably higher
than the original TRAI estimates as
a result of higher traffic.
international long distance (ILD) and national long
distance (NLD) operators are also unlikely to be affected
in a big way for the same reason.