Trai readies plan to slash tariff

Telecom Regulatory Authority of India on Wednesday set in motion a process for another round of tariff reduction with the issue of a consultation process on access deficit charge regime for 2007-08 with specific stress on lessening of this levy on ISD calls.

The consultation paper addresses the review of ADC regime and has raised specific issues for consultations like funding of ADC in 2007-08, whether the Authority should maintain the present reduction trend in ADC amount and what should be the mechanism of contribution to ADC.

Trai's decision to reduce the rates of ADC after due consultation would pave the path for lower telecom tariffs, sustained growth, while reduction in rate of ADC on international calls would reduce arbitrage hence less incentive for ILD grey market, greater flexibility to service providers, a Trai

statement said.

As a part of an annual review, the authority's consultation paper addresses review of ADC regime, the applicable amount of ADC for 2007-08 and its mechanism for funding/collection, including ADC as Percentage of Revenue, per minute ADC on ILD calls, and its various variants, admissibility of ADC for other service providers (other than Bharat Sanchar Nigam Ltd) for their fixed wireline operations.

At present the total estimated amount of ADC for 2006-07 was Rs 3,335 crore (Rs 33.35 billion), out of which Rs 3200 crore (Rs 32 billion) was the estimated ADC for BSNL.

For funding of such amount the ADC rates are Rs 1.60 per minute for Incoming ISD calls and 0.80 per minute for Outgoing ISD calls.

There is 1.5 per cent of adjusted gross revenue of all service providers -- access providers, NLD and ILD operators.