The Bharat Sanchar Nigam Ltd on Monday warned that the fixed line telephone charges would go up considerably in case telecom regulator TRAI reduces the access deficit charge which the public sector company gets from private operators for its rural operations.

ADC is a levy paid by private operators to state-fun Bharat Sanchar Nigam Ltd for undertaking rural telephony services.

• Cell tariffs will drop if ADC is cut

"The fixed line telecom charges are below cost. The telephone rental per month could be as high as Rs 360 and call charges also could increase if the ADC is reduced," A K Sinha, CMD, BSNL, said, adding that no operator or any other stake-holder would like that scenario.

Sinha said ADC is not a benefit to BSNL, but covers its cost in providing services in rural areas and in fact all private basic operators who go to rural areas get the ADC.

He said BSNL had pleaded with TRAI not to reduce the ADC.

The current rental for BSNL urban fixed-line subscriber is Rs 250 a month.

At present only cell phone tariffs are cost based. Even in a city like New Delhi fixed line tariffs are lower than the cost. If there is no ADC, rentals will have to be doubled and number of free calls will have to be brought down to zero to keep the service viable.