Reduced Adc Rates from Feb 1, 2005

[deepu 0]

Telecom tariffs are likely to fall as the Telecom Regulatory Authority of India substantially lowered access deficit charge.

ADC is a levy paid by private telecom operators to state-owned Bharat Sanchar Nigam Ltd for rural operations.

In a new regime, TRAI has done away with the distance slab within the country and has imposed a fixed rate of only 30 paise ADC for all types of calls across the nation.

Importantly, TRAI has lowered ADC on incoming international calls to Rs 3.25 per minute from existing Rs 4.25 while to Rs 2.50 a minute on outgoing ISD calls from Rs 4.25.

The new regime will come into effect from February 1, 2005, TRAI said, adding it would review ADC rates within three to six months of its implementation on the basis of examination of new data.

Meanwhile, Sunil Mittal, Chairman of Bharti Tele-Ventures, announced that the entire benefit of the ADC cut will be passed on to customers.

The regulator claimed that total ADC amount going to BSNL would remain unchanged at Rs 5,000 crore (Rs 50 billion).

"Due to exceptionally large increase in minutes that fund ADC, the per minute ADC has been decreased while keeping the total amount unchanged," TRAI said in a statement, adding that the new ADC regime would result in lower prices for domestic consumers.

The regulator has not acceded to the demand of private operators that ADC be collected on the basis of revenue of the operators and not on the basis of calls.

"Several stakeholders, including BSNL, have opposed implementation of revenue-share ADC regime on the grounds that it will increase rentals and local call charges," TRAI said, adding that 'changeover to revenue-share regime and its merger with Universal Service Obligation is indeed the final solution for taking care of all anomalies and issues associated with ADC.'

[Basant 0]

Local, ISD calls may become cheaper as Trai cuts ADC

PTI[ THURSDAY, JANUARY 06, 2005 01:58:30 PM]Sign into earnIndiatimes points

NEW DELHI: Telecom tariffs are likely to fall as the Trai on Thursday substantially lowered Access Deficit Charge, a levy paid by private operators to BSNL for rural operations.

In a new regime, Trai has done away with the distance slab within the country and has imposed a fixed rate of only 30 paise ADC for all types of calls across the nation.

Importantly, Trai has lowered ADC on incoming international calls to Rs 3.25 per minute from existing Rs 4.25 while to Rs 2.50 a minute on outgoing ISD calls from Rs 4.25. more

The new regime would come into effect from February 1, 2005, Trai said, adding it would review ADC rates within three to six months of its implementation on the basis of examination of new data.

The regulator claimed that total ADC amount going to state-owned Bharat Sanchar Nigam Ltd would remain unchanged at Rs 5,000 crore.

"Due to exceptionally large increase in minutes that fund ADC, the per minute ADC has been decreased while keeping the total amount unchanged," Trai said in a statement, adding that new ADC regime would result in lower prices for domestic consumers.

The regulator has not acceded to the demand of private operators that ADC be collected on the basis of revenue of the operators and not on the basis of calls.

"Several stakeholders, including BSNL, have opposed implementation of revenue-share ADC regime on the grounds that it will increase rentals and local call charges," Trai said, adding that "changeover to revenue-share regime and its merger with Universal Service Obligation (USO) is indeed the final solution for taking care of all anomalies and issues associated with ADC."

Operators are likely to announce new tariff rates within next few days. Let us watch if the benefit of reduced ADC rates is passed on to consumers.

[abhay 0]

yup "it would be passed on to the consumers the very same day :'( " as mr sunil mittal said !!

the key point over here to notice is that the operator is free to make a choice between giving the benifit for local calls / national long distance calls (NLD) / international long distance calls (ILD) to the consumers from the ADC.

but MR Pradeep bajpal , chairman , TRAI said that it would want the operators to give the benifit in local calls.

[AmanJ 1]

it would b great if cut is on local calls.

but as its mentioned the adc has been cut for std and isd calls. so change is most expected in std and isd calls only.

lets hope for the best

[Puneet 0]

Considering the change in ADC regime for calls originating from Reliance(Mobile) network and terminating on Reliance (Fixed/Fixed-wireless) network, it would be interesting to look forward to the prepaid 440 and 200 RCV and also the unlimited intra-circle schemes on post-paid plans.

Otherwise, there doesn't seems a lot of scope for drop in Reliance NLD call rates which are already low at Re 1 per min and Re 2 per min on India Cards.

[Basant 0]

By the way what is existing level of ADC on different type of calls and what exactly is the impact of reduction? This would be interesting for all of us to know....................

I belive for Reliance as well as other GSM operators now LOCAL means entire State.

[Puneet 0]

By the way what is existing level of ADC on different type of calls and what exactly is the impact of reduction? This would be interesting for all of us to know....................

I belive for Reliance as well as other GSM operators now LOCAL means entire State.

23580[/snapback]

There was no ADC on intra-circular mobile-to-mobile calls and that remains as such. There was an ADC of Re. 0.30 for intra-circular mobile-to-fixed calls which also remains same. There is no reduction in ADC on local/intra-circular level for mobile operators. On the contrary, Reliance now needs to pay Re 0.30 to BSNL for all calls originating from RIM and terminating on FWP/FWT/FLP which was retained by Reliance earlier.

As for inter-circle calls, new ADC is Re. 0.30/min across all distance slabs. There is reduction of 20p for distance slab 200-500 km and a reduction of 50p for distnace slab >500 km. Again, ADC for calls from RIM-to FWP/FWT/FLT now goes to BSNL.

This might change some calculations at Reliance and we might see a change in tariffs. But again, tariff calculation is again a complex process so we can just wait and watch :'(

PS: Just finished reading the 69 page TRAI regulation

Edited January 6, 2005 by Puneet

[Chirag 5]

Well, guess its time to call ALL INDIA as 1 circle Same tariff across the country!

[raccoon 53]

Considering the change in ADC regime for calls originating from Reliance(Mobile) network and terminating on Reliance (Fixed/Fixed-wireless) network, it would be interesting to look forward to the prepaid 440 and 200 RCV and also the unlimited intra-circle schemes on post-paid plans.

23578[/snapback]

Well, if those 440/220 vouchers wont be around, one more advantage of RIM along with free R-World will be out! The only reason Im still with RIM is because of the 440/220 vouchers...

TRAI has done a really wonderful job ...the only operator offering this facility now may have to roll it back...

[vb86 0]

will dapo users benifit from this, since we are on a fixed 3 yr contract???

[deepu 0]

From Puneet's post it seems that the local call rates may not change much.

We may see reduction in STD rates... But how much??? Lets wait and watch!!

[rakesh5295 0]

Hope rates for dapo users will come down who now pay rs. 4 per min for std to land line

[Puneet 0]

Hope rates for dapo users will come down who now pay rs. 4 per min for std to land line

23638[/snapback]

I dont think STD rates for DAPO will come down. As Reliance had not reduced the rates even in the last revision. We have been paying the same STD rates since May 2003, and ADC had been slashed for Mobile to landline calls once in between, though ADC was introduced on Mobile-to-Mobile calls in the same.

Reliance actually wants us to quit DAPO

Well, guess its time to call ALL INDIA as 1 circle  Same tariff across the country!

Well, there is still a distance based component. Telephone tariffs comprise of four components (origination charge, transit/carrying charge, termination charge and ADC). And carrying charge which is paid to the NLDO is still absed on distance slabs. However, most mobile companies have already been offering single tariffs for whole of India.

[chandramauli 0]

i dont think it will make much change to the current biling system ...

just reducing a rupee or so want reduce our bills ....

whts ur says guys?

[Chirag 5]

I quite agree with Chandramauli... whtever the case maybe, the overall bill doesn't change drastically! Remember that 25 bucks added extra on Joy Plans after reducing call rates?

Anyways, doesn't make a difference if DAPO call rates rn't reduced, coz if STD is the only hitch, then use IndiaCard or Free Mins on Rewards!

[Arun 795]

Trai wants revenue share cut to 6%

Business Standard Economy Bureau in New Delhi | January 14, 2005 10:38 IST

In move that could lower telecom tariffs further, the Telecom Regulatory Authority of India on Thursday recommended a reduction in revenue share from 15 per cent of the adjusted gross revenue to 6 per cent under the unified licensing regime.

In its recommendations on unified licensing to the department of telecommunications, the regulator also mandated a shift to the new regime after five years, though it will be optional for the time being. After two years, no new service-specific licence will be issued.

Tata Tele, Bharti and Reliance Infocomm already have unified access licences.

Once the unified licensing regime is in place, a licence-holder will be able provide access, long-distance telephony, Internet and broadcast services through a single wire or wireless medium. A unified licence holder will be required to pay 6 per cent licence fees.

The registration fee under the unified licensing regime has been fixed at Rs 107 crore (Rs 1.07 billion), in addition to a charge based on the entry fee paid by the new basic service operators. This will be gradually brought down to Rs 30 lakh (Rs 3 million) over five years from the date of the implementation of the new regime.

In the meantime, the regulator has suggested that access providers, who do not wish to offer long-distance services, can enter a new circle for two years after paying 16 per cent of the fixed fee paid by basic service operators in 2001.

This would mean that an operator can offer services in Delhi after paying Rs 8 crore (Rs 80 million) or in Mumbai after a payment of Rs 5.3 crore (Rs 53 million).

In a relief to companies like Bharti, which had received a 2 per cent concession on licences fee for two years, the regulator has proposed a licence fee of 5 per cent for six years.

Also, operators like the Tatas, which are in the access business through Tata Tele and in the long-distance business through VSNL, would not be required to pay licence fee under the unified licensing regime. According to the regulator, a company, which holds 10 per cent or more equity in another company, did not need a new licence.

Class licences for V-SAT and niche operators has also been proposed with the licence fee of 6 per cent of AGR and minus registration fees.

The niche operators can provide fixed telecom services, including multimedia, Internet telephony and other Internet Protocol-enabled services in areas with less than one per cent teledensity. The details, including the possibility of waiving spectrum charges, are to be decided in due course.

The regulator has also provided for licences through authorisation, which would not attract any registration or licence fee. Services like radio paging, Internet and limited Internet telephony can be provided under this segment.

In case a unified licencee wants to offer "broadcasting service", the licencee would have to apply to the information and broadcasting ministry. A standalone licence for broadcasting services, too, would continue to be issued under the prevailing process by the ministry.

Cellular Operators' Association of India Director General TV Ramachandran said the move to lower licence fees was expected to result in lower tariffs in the coming years.

He also said that in the new regime more players were expected to enter the international and domestic long-distance business, which would further help in lowering tariffs in these segments.

He, however, said there may not be too many takers for the niche operator licences. "The concept lacks practicality," Ramachandran said.

Bharti executives added India had one of the highest taxed telecom industry in the world and the lower licence fee was a step in the right direction.

"Instead of proposing niche operators, the government and the regulator should provide incentives to the existing players to enter rural and remote areas," an executive said.

[deepu 0]

In a major relief to the Telecom Regulatory Authority of India and consumers, the telecom tribunal on Monday refused to grant a stay, sought by MTNL, on the new access deficit regime starting from February 1, paving the way for lower long distance mobile calls.

Long-distance tariffs will crash from Tuesday with TRAI reducing the access deficit charge given to telecom operators Bharat Sanchar Nigam Ltd and Mahanagar Telecom Nigam Ltd by up to 62 per cent.

Domestic long-distance call tariffs, for both fixed and cellular phones, will be lowered by up to 50 paise a minute, while international long-distance (ILD) calls are likely to be reduced by about Rs 2 a minute.

Local call tariffs, however, will remain unchanged.

TRAI had reduced the ADC component on STD calls from 80 paise a minute to 30 paise a minute for calls made over 200 km and from 50 paise a minute to 30 paise a minute for calls made between 50 km and 200 km.

On outgoing ISD calls, TRAI has brought down the deficit charges by 41 per cent to Rs 2.50 a minute from Rs 4.25.

The reduction in the charges could lead to a corresponding slash in the ISD tariffs.

A call to the US that now costs an average of Rs 16 a minute is likely to cost around Rs 14 a minute from February 1.

Deficit charges on incoming calls have also been decreased from Rs 4.25 a minute to Rs 3.25 a minute.

This is only an interim order and the matter has been posted for hearing on February 24.

It will still be open to Telecom Dispute Settlement Appellate Tribunal to consider Mahanagar Telecom Nigam Ltd's petition on merits of the new ADC regime as the tribunal has already ruled that it had prima facie jurisdiction to adjudicate on matters relating to regulations.

Meanwhile, the tribunal allowed Association of Unified Service Providers of India's application to be treated as an appeal. AUSPI had earlier filed an application to intervene in the case.

TDSAT asked TRAI to give a reply to the main petition filed by MTNL and that of AUSPI within two weeks.

The tribunal has maintained that it has jurisdiction to hear the matter in the wake of TRAI questioning its role on matters challenging regulations, ADC being one of them.

In another developement, the Delhi High Court, which is hearing a petition of TRAI challenging TDSAT's jurisdiction over regulations, today adjourned the hearing on the case to next week.

Big telecom players Bharti, Hutch and Reliance have said they would pass on the full benefit of lower ADC to their subscribers. Airtel and Hutch have reduced long-distance tariffs by Rs 1.75 for ISD calls and 35 paise for STD calls, a follow-up of the TRAI's new lower ADC regime, would still be more than double of those offered by BSNL.

[Arun 795]

New Delhi February 01, 2005

Service providers Reliance Infocomm and Idea Cellular are yet to announce new tariffs factoring in the lower access deficit charge that would come into effect from midnight.

While announcing the ADC cut, the Trai had asked all operators to pass on the benefits to the consumers.

A Reliance spokesperson said they would announce the new long-distance tariffs on Tuesday as they were awaiting the outcome of the Telecom Dispute Settlement and Appellate Tribunal’s hearing on the MTNL petition challenging the Trai decision.