Will STD, ISD rates really come down?

Amid expectations that Thursday levy cut would greatly facilitate reduction in STD, ISD rates, Unified Access provider Bharti on Friday said unless there was reduction in access deficit charge levy, along with a shift to revenue-sharing, there may not be any significant drop in call rates.

"As for specific NLD tariff reduction following the licence fee cut, the answer is no. There is no major impact... We can only pass the benefit what we save and since we get a carriage charge of less than 50 paise, the cut envisgaes only a 8-9 per cent saving in cost and passing a component of this would result in a very small amount of call rate drop," Akhil Gupta, joint MD & CFO, Bharti told PTI.

STD, ISD tariffs will reduce by 9%

National distance tariffs are set by the access providers... so, as long as the access provider does not go ahead with a major reduction in charges, NLD rates would not see a drop... Government in order to supplement this reduction in licence fee and revenue share, must reduce the ADC levy and must shift to a revenue-share based ADC collection, he said.

"ADC adjustments are needed to result in a noticeable change", he said. ADC is paid to Bharat Sanchar Nigam Ltd by private operators to compensate the PSUs un-remunerative operations.

On the expected jump in the volume, he said it is a normal process to see some elasticity in demand whenever there are some levy cuts.

The cut in entry fee does not impact us at all. We were facing competition earlier also, Gupta added.

Government on Thursday announced reduction in licence fee for STD and ISD licences to a uniform Rs 2.5 crore (Rs 25 million) from the existing Rs 100 crore (Rs 1 billion) and Rs 25 crore (Rs 250 million) respectively with diluted roll-out obligations.