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India: TDSAT will not stay TRAI order on removal of ADC Print E-mail
Friday, 03 October 2008

India’s telecommunications tribunal will not stay the regulator’s (TRAI) directive to remove the Access Deficit Charge (ADC) levy paid by private telecom operators to state-owned operator BSNL on incoming international calls in rural areas.

The Telecom Disputes Settlement and Appellate Tribunal (TDSAT) said since the main petition, in which BSNL challenged the phased reduction of the ADC, was still pending, there was no need to stay TRAI's decision to do away with the ADC at this stage.

The ADC is intended to help BSNL cover the costs of providing wireless and wireline service in rural areas for below the cost.

In its application, BSNL submitted that TRAI plans to eliminate the ADC effective September 30, 2009 and this end date would harm its business.

"TRAI has reduced ADC payable on international incoming calls from Rs 1 to Rs 0.50 and this would phase out the same from October 1, 2008. Even ADC payable to BSNL on incoming calls would be completely stopped," said BSNL in its application.

Terming it an 'irrational and arbitrary decision' by TRAI, BSNL submitted that to fund its rural obligations and to compensate for its losses, the ADC should continue.

TDSAT has combined the three ongoing disputes in which BSNL has challenged the ADC reduction for the financial years 2006-2007 and 2007-2008. The tribunal will hear the petition at its next hearing on October 22.

TRAI has decided to abolish the ADC from 2008-09. For the financial year 2007-08, TRAI reduced ADC by 37%.

Source: The Press Trust of India -  WDR/Intelecon Regulatory News.