BSNL needs Rs 5,000 cr to tide over ADC loss

Bharat Sanchar Nigam Ltd, which is feeling the pinch over reduced payment of access deficit charge -- a levy which it gets from private players to offer telephony in loss-making areas -- is seeking retaining of the old ADC amount of Rs 5,000 crore (Rs 50 billion) a year from the Telecom Regulatory Authority of India's prescribed Rs 3,200 crore (Rs 32 billion).

A senior BSNL official said if government is asking BSNL to go to loss areas, the replenishment mechanism has to be there.

Assess the loss fairly and squarely and then fix the amount. The earlier amount of Rs 5,000 crore was the 'barest minimum' ADC amount based on fundamentals on the cost of laying rural telephony.

BSNL has already moved Telecom Disputes Settlement and Appellate Tribunal in an appeal against the TRAI order cutting down the ADC amount. In the same order MTNL was taken off from the ADC receipient list which cost the NYSE-listed company Rs 400 crore (Rs 4 billion).

BSNL's ADC receipt was down by 33 per cent. The case is likely to be heard in the last week of May.

TRAI had ordered the entire ADC regime to be over by 2009 saying it was was 'depleting' regime. To this, the official said as long as government is 'forcing' BSNL to go to these unproductive areas, the PSU needs payment to go there.

The regulator had proposed to reduce BSNL's share of ADC to as low as 2 to 3 per cent in the coming years from the present 10 per cent. In its response, BSNL had demanded an ADC share of 7 to 8 per cent.

BSNL had filed an appeal in the TDSAT against the revised ADC regime of TRAI, on the grounds that the proposed amount collected from the charges was inadequate to support 1.4 crore (Rs 14 million) fixed line telephone connections in the rural areas.

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