BSNL drags TRAI to tribunal over ADC phaseout

NEW DELHI: State-owned BSNL on Wednesday challenged sector regulator TRAI’s decision to phase out Access Deficit Charge (ADC) levy from April 1, 2008, before TDSAT, the telecom tribunal. Till March, 2008, all telcos were paying 0.75% of their total revenues towards ADC, which is used to support state-owned BSNL’s unviable fixedline operations in rural India. On international calls to India, TRAI had halved ADC to 50 paise per minute from April 1 to September-end, after which it will be phased out. The phasing out of this levy will enable the industry to save about Rs 700 crore per annum. Last year, BSNL had got about Rs 2,000 crore as ADC. In its submission to the tribunal, BSNL has said that the regulator’s decision to do away with the ADC regime was arbitrary while also adding that TRAI was being indifferent to the rural telephony initiatives of the PSU. TRAI has, however, justified its move to do away with the ADC regime on the grounds that the total support provided to BSNL over the last couple of years under various initiatives, which includes reimbursement of licence fee and spectrum charges, moratorium on payment of interest, support from Universal Service Obligation Fund(USOF), ADC funding and exemption on entry fee was about $8 billion (Rs 31,500 crores), while adding that the PSU cannot be supported in perpetuity. In a bid to pacify the concerns of state-owned BSNL, which has warned that it would be forced to discontinue all its fixedline operations across rural India if the ADC levy were to be abolished, TRAI has also recommended that the government provide a subsidy of Rs 2,000 crore per annum to the PSU for the next three years from the USOF. All telcos pay 5% of their total revenues towards the USOF, a fund that is dedicated to improve communication facilities in rural India. Currently, the unutilised amount in the USOF is about Rs 16,000 crore.
1 May, 2008, 0441 hrs IST, TNN
THE ECONOMIC TIMES

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