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TRAI kicks off ADC review; tariff may fall further

19-March-2005
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TRAI kicks off ADC review; tariff may fall further

In less than two months of the new levy regime that resulted in financial loss of about Rs 1,700 crore per annum to the two PSUs - BSNL and MTNL the TRAI on Thursday came out with another consultation paper to review the existing regime.

The existing levy, known as Access Deficit Charge (ADC), regime came into effect from February 1, 2005, had resulted in lower long distance tariffs on mobile phones. These tariffs could fall further once the new regime comes into effect.

Immediately after announcement of last ADC rates, BSNL had claimed that they would take a financial hit of about Rs 1,200 crore annually while MTNL had projected a loss of Rs 450 crore. MTNL had even challenged the TRAI's existing ADC regime in the TDSAT but had not got any relief.

In the consultation paper, TRAI has sought traffic data details from various operators and their views on various contentious issues including further reduction in the ADC in view of increased traffic.

The Authority has sought views on issues including justification of ADC on Fixed Wireless Lines and admissibility of ADC for non-BSNL Fixed Line Operators; ADC as Percentage of Revenue (a long standing demand of cellular operators).

Interconnection Usage Charges (Carriage and Termination issues) including those for Incoming International calls, and whether to have differential rates for carriage and termination would also figure in the next round of review.

The TRAI would also study the implications of increasing disbursement of Universal Service Obligation (USO) Fund on the quantum of ADC payable.

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