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Overseas call rates to be cut by 10-15%By Dr arvind, Section Telephone
After a steep cut in roaming tariffs, telecom regulator Trai is set to make international calls 10-15% cheaper by March.
The move is linked to a reduction in access deficit charges (ADC) payable by operators to government. While revised ADC rates are usually announced in February, this year the regulator is issuing a consultation paper in February to be followed by its final word on new tariffs by March or April.
ADC is paid for all voice calls on a per minute basis for every incoming and outgoing call from India. ADC set to vanish from April 2008 For incoming calls, international subscribers pay double Rs 1.60/minute regardless of country of origin, time or type of phone (fixed or mobile) called in India. This differential ADC between internationally originated and local calls has spawned the growth of a flourishing grey market regime, acknowleded in a TDSAT order of March 2005 as a formidable national security threat. In January, Trai sought specific details from ILD operators relating to international minutes without CLI and names of countries/foreign carrier. The purpose of ADC was originally to cover the deficit arising due to access tariffs being below costs. Trai first instituted this in 2003. Click on "Full Story" for more...
However, growing revenues, an exploding subscriber base and mobile penetration of nearly three times vis-a-vis fixed lines has reduced the relevance of ADC. It is now viewed as an unnecessary cost imposed on both Indian and international consumers while making international calls, explaining the initiation of a fresh consultation process.
Trai's calculations show the total ADC collected for 2006-07 as Rs 3,335 crore. Of this, Rs 1,278 crore are expected from domestic calls charged at 1.5% of adjusted gross revenue (AGR) for all service providers. Of the rest, outgoing international calls account for Rs 2,574 crore and incoming ISD calls Rs 1,800 crore. Trai has committed that by 2008, ADC will be merged with the USO regime which is charged at 5% of AGR. That makes 2007-08 the last year for ADC, unless Trai concludes that consumers need to be free of this burden already. In any event, Trai will have to reduce ADC both for incoming and outgoing calls to a very large extent due to multiple factors growing opposition from consumers, increasing revenues and mobiles overtaking fixed lines. With the exception of BSNL, which is the main beneficiary of ADC, Indian service providers and consumers are vehemently opposed to this per minute charge since they accuse BSNL of a failure to demonstrate either a justified need or appropriate use for such high and unwarranted subsidy. From: The Times Of India, JAN-30,07
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