In a blow to private operators, Communication and IT Minister Dayanidhi Maran said on Thursday that private cell operators would have to continue to pay Access Deficit Charge to Bharat Sanchar Nigam for the next two years.
"BSNL has done a lot of social work. No private player wants to go to rural areas and BSNL has covered the rural areas virtually alone. I think it needs to be compensated for that," Maran told reporters in New Delhi.
Asked about the relation between BSNL reducing tariffs and ADC support, as claimed by the private operators, the minister said "BSNL has slashed the tariff purely in the competitive spirit and ADC has no role in it."
On the issue of Telecom Regulatory Authority reviewing the ADC after one year, Maran said the regulator should not be reviewing the policy very often. "They (TRAI) have reduced the period to three years from the earlier five years, so let them stick to that.
"But let TRAI give its recommendations. We value its inputs but final decision lies with the government," Maran said.
Recently, Cellular Operators Association of India had petitioned TRAI demanding withdrawal of ADC saying BSNL was able to reduce tariff due to this support and also suggested that ADC, if at all levied, should be based on percentage of revenue instead of calls.
Maran said BSNL's rural operations need to be subsidised and the payment of ADC by private players is for this purpose. As one year of ADC's current regime has passed, it should continue for two more years in its present form.
According to COAI "the present regime is flawed as it is only helping fund anti-competitive activities."
In its earlier communication to the Authority, T V Ramachandran, director general of COAI had said, "ADC provides BSNL a very comfortable financial buffer and incentive to slash prices with impunity, which none of its competitors can match."
Maran, however, refuted COAI's charge saying BSNL has taken the decision with regard to tariff cut purely as a competitive measure.