labels: telecom, telecom regulatory authority of india
TRAI plans ADC reviewnews
22 January 2007

New Delhi: The Telecom Regulatory Authority of India will undertake another review of the controversial access deficit charges (ADC).

A decrease in ADC will result in overall reduction in telephone tariffs.

The telecom regulator had reduced the subsidy by 33 per cent the previous time it had conducted a review to Rs3,335 crore for the year 2006-07 from Rs5,340 crore. The reduction had enabled operators to lower STD rates to Re1 per minute.

ADC is a levy that telephone subscribers in urban areas pay to subsidise cheaper phone services in rural areas. According to TRAI sources, the total quantum of money collected should come down further as the traffic volume has increased substantially.

Since Bharat Sanchar Nigam Ltd is undertaking most of the rural telephony, the money collected by private operators in the form of access deficit charges is passed on to the state-owned telecom company.

While private telecom operators are in favour of completely doing away with the subsidy, BSNL wants an increase in the amount collected. At present operators pay 1.5 per cent of their annual revenues as ADC.

As per TRAI's own roadmap, this ADC is to be merged with the Universal Services Obligation (USO) Fund for which operators contribute 5 per cent of their annual revenues. BSNL is, however, expected to oppose the move as it had done on previous occasion when it had filed a case in the telecom dispute settlement tribunal against TRAI.

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TRAI plans ADC review