Trai all set to phase out ADC, pave way for lower mobile tariffs

New Delhi: : Local and domestic long distance mobile call tariffs may drop further, thanks to Telecom regulator Trai’s announcement to do away with a fee that private telecom operators pay to BSNL. After Trai announced on Thursday that private players would be exempted from paying the fee by April 1, Cellular Operators Association of India director general T V Ramachandran said, “The industry is going to pass on the benefit to customers, but it will be to the extent of relief it gets.”

Private operators were hitherto paying the fee called Access Deficit Charge (ADC) to BSNL at the rate of 0.75 per cent of their Adjusted Gross Revenue (AGR) or about Rs 600 crore a year. The ADC has two parts. Besides, 0.75 per cent of Adjusted Gross Revenue (AGR) that service providers pay to BSNL, private operators also pay Re 1 per minute on international incoming calls. The component on international incoming calls would be payable at a reduced rate of 50 paise between April 1 to September 30, after which this component would also be phased out.

Through the amendment, Trai has decided to phase out ADC as a percentage of AGR from April 1, making all domestic calls free from the incidence of ADC from that date. Access Deficit Charge (ADC) was paid by private telecom service providers to compensate BSNL for offering services in rural areas at subsidised rates. However, BSNL which has been advocating continuation of this levy got some respite, as Trai has decided to recommend to the Government to provide Rs 2,000 crore annually for three years to compensate the loss of ADC revenue.

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