Telecom rates to plunge; ADC cut

Telecom regulator TRAI on Thursday announced a substantial cut in levy accrued to state-owned BSNL at Rs 3,200 crore (Rs 32 billion) from over Rs 5,000 crore (Rs 50 billion) and shifted to revenue share regime from per call basis.

As per a statement issued in New Delhi, TRAI fixed the levy (Access Deficit Charge) at 1.5 per cent of the adjusted gross revenue of private operators - a move that would bring down telecom tariffs drastically.

Virtually moving towards killing distance when it comes to tariff for domestic long distance calls, TRAI has cut the carriage charges by over 50 per cent and announced a ceiling charge of Rs 0.65 a minute - irrespective of distance.

This would result in substantial cut in STD rates. According to TRAI, ADC on international calls shall continue to be on per minute basis but at a reduced rate of Rs 1.60 per minute for incoming calls, translating into more than 50 per cent reduction) and on outgoing ISD calls, the levy has been lowered to just 80 paise a minute reduced by over 65 per cent.

TRAI claimed that the decision to lower the ADC on ISD calls would in turn reduce arbitrage and hence grey market.

For calculating the adjusted gross revenue of the operators, TRAI has decided to subtract revenue from rural subscribers in the gross revenue.

The new ADC regime would come into effect from March 1, 2006. There has been no change in mobile and fixed termination charges from the existing level of Rs 0.30 per minute.