Telecom operators may lower tariffs on lower ADC

Long-distance telecom (STD) tariffs are set to become cheaper with regulator Trai announcing on Thursday that access deficit charge (ADC) on domestic calls will be eliminated from April. International calls to India will also be cheaper as Trai has halved their ADC to 50 paise per minute from April 1 to September-end, after which it will be phased out. However this reduction of charges on incoming long distance calls will have no benefit for Indian consumers, but will help consumers in other countries like NRI’s to call their relatives back home at rates lower by 50 paise for every minute of the call. This will also help reduce the grey market calls in the international telephony market due to lower arbitration margins.

Currently, all telcos pay 0.75% of total revenues towards ADC, which is used to support state-owned BSNL’s unviable fixed-line operations in rural India. Private operators who were bearing the burden of paying the charges till now stand to collectively save about Rs 750 crore, for individual subscribers this move will translate into a reduction of about 0.75 per cent on their monthly bills. For example if a mobile user spends Rs 200 a month he will now have to pay Rs 1.50 less. The Cellular Operators Association of India also said that the savings will be passed on to the consumers though it may not result in any significant decrease in tariffs when distributed among 300 million subscribers. Within hours of the Trai announcement, all telcos said they would pass on the savings to subscribers.