Further ADC cut on the cards

This will help telecos slash long-distance tariffs

The process to further reduce the access deficit charge (ADC) imposed on private telecom service providers has been set in motion with the regulator issuing a consultation paper on the issue on Wednesday. The move will help telcos slash long-distance tariffs — both NLD and ILD charges.

ADC is a fund, most of which is paid to Bharat Sanchar Nigam Ltd (BSNL) by private telecom service providers on national and international long distance calls. Telecom Regulatory Authority of India (Trai) chairman Nripendra Misra, in an interview to DNA Money (edition dated October 25, 2006), had said that the ADC road map set by Trai would be followed.

“Trai will go by the sunset date for ADC,” Misra had said way back in October, indicating that ADC would be reduced in 2007 and completely phased out by the financial year 2008-09.

In early 2006, Trai, under the chairmanship of Pradip Baijal, had announced a reduction in the total quantum of ADC from Rs 5,340 crore per annum to Rs 3,335 crore per annum. Baijal had also said that ADC would be phased out by 2008-09 (the sunset date that Misra referred to).

The consultation paper has asked whether the present reduction trend in ADC should be maintained. Also, it has sought consultation on the mechanism of contribution to ADC.

The telecom industry has to give its inputs on the issue to Trai by February 26.