Reliance Infocomm Ltd has opposed to persisting with access deficit charge even as state-owned telephony major Mahanagar Telephone Nigam Ltd and Association of Unified Telecom Service Providers of India are favouring ADC in its present form.
ADC is an existing levy paid by other operators to Bharat Sanchar Nigam Ltd to compensate for its services in rural and semi-urban areas. Reliance Infocomm opposed this saying that the concept of ADC "does not arise in the Indian context" and "has no economic rationale".
They have also sought intervention of the Telecom Regualtory Authority of India, resulting in the regulator making a move to review the scheme and roll out a consultancy paper on March 17, 2005.
Reliance Infocomm, in its response to the consultancy paper (a copy of which is available with Business Standard said: "In our view, the current ADC levy is an uncalled for surcharge imposed on private operators to pass on unwarranted benefits to Public Sector Unit (BSNL). The concept has no economic rationale and is not applicable in the present context."
"If at all ADC has to be made applicable, it needs to be clearly defined whether it is applicable on account of general issue of affordability or only in respect of phones in rural areas," it said.
The definition of rural areas for ADC levy also needs to be defined and the parameter cannot be similar to the one adopted for the census, as "the PSU operator has claimed to have around 33 per cent of the total deployment of lines in rural areas".
According to RIL, BSNL is also using the same infrastructure for services in rural areas, thereby spreading its capex and revenue recovery.
BSNL also earns more revenue from a large number of services like wireless in local loop, long distance, cellular mobile, broadband internet access among others, giving the PSU a tremendous cost advantage using the existing access network to compete with other private operators.
Meanwhile, BSNL has opposed frequent reviews of ADC and has gone on to demand Rs 11000 crore (Rs 110 billion) as arrears of previous regimes.
Other service providers like MTNL, AUSPI, Tata, VSNL, BPL, Spice Telecom and CellOne favour the ADC albeit with a few minor alterations.