NEW DELHI: Setting the stage for a reduction in long distance call tariffs by private phone companies, the Telecom Regulatory Authority of India (TRAI) on Thursday announced changes in the norms for cess paid by private operators to Bharat Sanchar Nigam Limited (BSNL).

"We are expecting the tariff to come down following the new regime. However, we cannot say by how much as tariffs are market driven,'' said TRAI Chairman Pradip Baijal. BSNL is expected to suffer an annual revenue loss of Rs. 1,800 crore but could partially make up by buoyancy in the calling pattern.

The total amount of ADC will be reduced to Rs. 3,335 crores and the estimated ADC for BSNL would be Rs. 3,200 crore.

There will not be any ADC on per minute basis on domestic calls. ADC on international long distance traffic will continue to be on per minute basis but at a reduced rate of Rs. 1.60 a minute (over 50 per cent reduction) for incoming international calls. This is expected to reduce arbitrage and hence the grey market. ADC on outgoing international calls has been reduced to 80 paise a minute (reduction of over 65 per cent).

All phone service companies will pay 1.5 per cent of their aggregate gross revenues (AGR) as ADC to the BSNL which will retain ADC chargeable as percentage of its AGR. Unified Access Service Licensee/BSOs retain ADC as percentage of AGR of wireline subscribers and the balance will be paid to the BSNL. For estimation of ADC as a percentage of AGR, of access providers, the revenue from the rural subscribers will be subtracted.

Other basic phone companies, other than BSNL, would retain ADC in terms of percentage of AGR and also on outgoing international calls from their wireline subscribers. There would be no change in mobile and fixed termination charges from the existing level of 30 a minute.

Death of distance has been acknowledged by moving over to a ceiling carriage of 65 paise a minute irrespective of the distance.

No ADC would be charged on rural revenue of operators to encourage the penetration of telecom services in rural areas.

TRAI has also announced the strengthening of the monitoring mechanism of payment and receipt of ADC by operators.

The ADC would become zero by 2008-09.

To achieve this, ADC has been reduced to two-thirds of Rs. 4,800 crore to Rs. 3,200 crore annually.

The main criteria adopted by TRAI, while deciding the rates of ADC, was to maintain the total collection of ADC at around the present Rs. 2,000 crore from international traffic, as also to reduce the burden on domestic subscribers.

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