OneIndia hinges on ADC reduction

Private telecom operators offered divergent views on the advent of OneIndia. The reaction ranged from one of disdain to a COAI version that was effusive in its praise and subtle in its demand.

The central theme of the reactions was - let the government cut ADC and we will roll out OneIndia overnight.

Perhaps that was why the DoT on Friday moved fast to send a letter to Trai that sought to set in motion the process of enabling both BSNL and MTNL to implement OneIndia tariffs from March 1. The written communication wanted the regulator to put in place a revenue-share-based access deficit charge regime.

DoT sources said they had already received the PMO's nod to ask the regulator to work out this fresh regime.

Private operators want the ADC levy to be made a percentage of their revenues, possibly four per cent, against the existing per minute basis.

All STD calls in India at Re 1/min from March 1

At present, STD calls are subject to a 30 paise ADC, between 50 and 110 paise as carriage charge (based on distance) and 30 paise as termination charge, all on a per minute basis, making it unsustainable to offer long-distance at Re 1. TRAI may retain the per minute system for international calls.

"The reduction in STD rates and the subsequent increase in its volumes will help retain the ADC collected at the present level of Rs 5,000 crore per year. Additionally, this will help operators provide STD at Re 1," sources added.

"Very shortly, we will bring out the revenue-share-based ADC, as part of the new interconnect user charge regime. Along with the ADC, both carriage and termination charges will also be revised," Trai Chairman Pradip Baijal told Business Standard.

"Rural telephony will not suffer as operators will continue to pay 5 per cent of their revenues towards the USO," said a senior executive with a private service provider.

Welcoming the OneIndia plan, TV Ramachadran, director-general, Cellular Operators Association of India said, "Necessary corrections need to be made in the existing regime to address the anomaly of ADC being charged on a call-by-call basis, before the OneIndia tariffs came into effect on March 1, 2006."

When contacted, the spokesperson of a leading CDMA player said "the company was ready to offer similar plans overnight if the existing ADC and IUC regimes are revised. It is no big deal for us."

Endorsing this demand, Vikram Mehmi CEO, Idea Cellular said, "We have always supported the initiative of OneIndia from Day 1. We are happy that it has become a reality. But we await the removal of floor rates of carriage charge to pass on the benefits to customers."

"OneIndia will help achieve the target of 250 million phones set by the government by December 2007," added SC Khanna, secretary general of the CDMA body.